Ukraine’s Reserves Won’t Be Backed by Gold: Hetmantsev Explains Why.

Why the National Bank Prioritizes Liquid Assets Over Gold

According to Мінфін — Крипто/Фінанси: Danylo Hetmantsev, head of the Verkhovna Rada Committee on Finance, Tax, and Customs Policy, points out that despite rising gold prices, the National Bank of Ukraine (NBU) continues to favor liquid assets. This approach stems from the urgent need for rapid access to funds amid the country’s ongoing war. Gold, which currently makes up roughly 8.4% of Ukraine’s reserves, cannot take center stage in national financial strategy due to its poor liquidity.

During external shocks—such as the 2008–2009 financial crisis—Ukraine critically needs foreign currency readily available in accounts. Over the past two decades, central banks worldwide have been net sellers of gold, reflecting shifts in global investment strategies. However, as Hetmantsev sees it, gold simply cannot deliver the speed and flexibility the state requires under current conditions.

The Drawbacks of Gold as a Reserve Asset

Why can’t gold become a priority for Ukraine’s reserves? First, gold cannot be instantly used for government payments or purchasing defense supplies. Second, unlike U.S. Treasury bonds or currency deposits, gold generates no interest income, making it less attractive for financial reserves. Third, physical gold incurs additional costs for logistics, security, and specialized storage—complicating its use during wartime.

Consequently, even as gold prices climb, the NBU opts for liquid assets, enabling quicker responses to the state’s wartime needs and helping maintain the stability of the country’s financial system.

The NBU’s preference for liquid assets reflects a strategic approach to reserve management in wartime, where speed of access to funds is critical. This decision also illustrates how international financial trends influence the national economy, as many countries are rethinking their investment strategies amid global instability. In the face of war and financial challenges, it is essential for Ukraine to preserve financial flexibility to meet its defense and social needs.