The European Commission proposed on Friday that the European Union facilitate, free of charge and at the official exchange rate, the conversion of Ukrainian banknotes into local currency, up to nearly 300 euros (10,000 hryvnias) per person fleeing the war in Ukraine. This measure will last for at least three months.

"The Commission today [Friday] adopted its proposal for a Council recommendation on the conversion of hryvnia (Ukraine's national currency) banknotes into the currency of host Member States by people fleeing the war in Ukraine," it said in a statement quoted by the newspaper Negócios.

The submitted proposal aims to promote "a coordinated approach so that all member states offer those fleeing Ukraine the same conditions for converting their hryvnia banknotes into the local currency, regardless of the member state hosting them," Brussels explains.

According to the European Commission, this initiative "is necessary" because the National Bank of Ukraine has had to suspend the exchange of hryvnia notes into foreign currency in order to protect Ukraine's limited foreign exchange reserves.

As a consequence, credit institutions in EU member states were unwilling to make the exchanges because of the limited convertibility of hryvnia notes and exposure to exchange rate risk.

Some Member States are now considering setting up national schemes that support the conversion of a limited amount of hryvnias per person into their local currency (euro or other), and the Commission's aim with today's recommendation is to promote a coordinated approach.