8 January 2019
order to prevent the accumulation of systemic risks in the financial sector
related to the capital inflows to Ukraine, the NBU has updated the reserve
requirements for funds received by banks in foreign currency.
to the NBU’s Macroprudential Policy Strategy,
reserve requirement for short-term funds is a macro-prudential tool that helps
to achieve two interim goals of this policy: prevent the accumulation of
liquidity gaps and lower the level of dollarization in the financial sector.
application of the reserve requirement for short-term external borrowings was
previously regulated by the Rules for Provisioning for Deposits and Loans in
Foreign Currency received from Nonresidents by Authorized Banks approved by
NBU Board Resolution No. 171 dated 18 June 2008, that loses effect with the
expiration of Decree of the Cabinet of Ministers of Ukraine No. 15-93 dated 19
February 1993 On the System of Currency Regulation and Currency Control.
previous Rules will be replaced by a new NBU Regulation On the Procedure for
Provisioning for Foreign Currency (Investment Metals) Deposits and Loans Received by the Bank from
Nonresidents. The document is of a preventive nature and will
only be applied in the event of accumulation of currency imbalances in
the financial sector and the adoption by the NBU of a respective additional
decision to establish specific reserve requirements.
NBU will still have the right to establish reserve requirements for foreign
currency received by the bank under deposit and loan agreements from
nonresidents and subject to repayment during the period up to 183 calendar
days. According to the document, these requirements also apply to similar
transactions with investment metals.
The approved Regulation also
simplifies the procedure for the bank to provide information on the amounts of provisioning for
the transactions of borrowing foreign
currency or investment metals. In particular, the certificate previously
provided by banks in paper form is replaced with
statistical information in electronic form.
of reserve requirement for short-term external borrowings will allow NBU to
prevent the accumulation of currency imbalances and systemic risks as a result
of banks’ intensified short-term borrowings of foreign currency (investment
as deposits and loans by nonresidents.
On the Procedure for Provisioning for
Foreign Currency (Investment Metals) Deposits and Loans Received by Bank from
Nonresidents approved by NBU Board Resolution No. 12 dated 3 January