The Limitations of Sovereignty

An interesting piece by Adam Tooze ¹ lays out the challenge of payments for central banks faced with the mass exodus of Ukrainian refugees faced with Russian invasion. Money has a public and a private role touch on financial obligations, authority and credit. But what happens when bank accounts, credit and debit cards and even cash are disrupted by war?

When your country is invaded, what is the value of the cash you carry? Who will take it? According to the Financial Times, Ukraine has suspended most currency trading and frozen the official exchange rate at the pre-war level for the hryvnia. It has imposed a moratorium on foreign exchange payments other than those funding the war effort.

With Ukrainian payment cards no longer working while hryvnia can still be exchanged, the exchange rate is floating. Its value has fallen from 7 hryvnia to the zloty, to about 20.