On 17 November 2014 the National Bank of Ukraine held a meeting with CEOs of the 40 largest Ukrainian banks. The discussion at this meeting centered on the effectiveness of NBU’s foreign currency auctions, exchange rate expectations of banks, protection of creditors and prospects of National System of Mass Electronic Payments (NSMEP) cards.
In the course of exchanging opinions the banks’ representatives and the regulator have agreed to continue the practice of holding currency auctions. The meeting participants have also agreed that dynamics of the current indicative exchange rate show that it approaches the equilibrium level.
Unsatisfied demand for foreign currency remains the main source of pressure on the foreign exchange market. However, a slight increase in foreign-currency revenues from exports has been observed recently and a panicky sentiment among the population has shown signs of abating, which had a positive impact on both the resource base of banks and the cash segment of the foreign exchange market.
The Governor of the National Bank of Ukraine Valeriia Gontareva assured those present that despite the difficult state of economy, ‘the country needs a flexible exchange rate-setting mechanism’. However, if the foreign exchange market volatility increases, the regulator may consider imposition of stricter administrative measures on foreign-currency debt settlement transactions under export-import operations. New restrictive measures will be implemented only in close cooperation with government authorities.
The problems of poor protection of banks’ rights as creditors and cleansing their balance sheets from ‘bad’ assets need to be addressed. Valeriia Gontareva said that improvement of the quality of assessing bank assets will become the key point for discussion at the meeting with representatives of leading audit firms which will be held in the nearest future.
Deputy Governor of the National Bank of Ukraine Yakiv Smolii spoke about the planned rebranding of the National System of Mass Electronic Payments (NSMEP) and invited the banks’ representatives to a narrowly-specialized meeting to discuss the competitiveness of the NSMEP card. ‘Considering that 97% of transactions using cards issued in Ukraine take place inside the country, it looks expedient for banks, the public and retailers to intensify their use’.
The banking meeting has ended in an agreement that the search for a balanced exchange rate has to continue and another meeting was slated for the next week.