On February 25, 2015, Governor of the National Bank of Ukraine Valeriia Gontareva and Minister of Finance of Ukraine Natalia Yaresko held a joint briefing on current developments in the foreign exchange market and measures to put the situation back on track.
When speaking about the current developments in the interbank foreign exchange market, Valeriia Gontareva emphasized that an insight into the supply and demand for foreign exchange provides no reasons to forecast a further drastic depreciation of the hryvnia. "The current situation can be attributed to psychological factors rather than fundamental factors," noted the Governor of the National Bank of Ukraine.
Valeriia Gontareva noted that the policy pursued by the National Bank of Ukraine provides an adequate response to the situation and envisages a set of measures to stabilize the foreign exchange market. "The National Bank of Ukraine as a regulator retains its role in the market by deploying administrative instruments. If required, we will resort to foreign exchange interventions, we have not backed off this option," said the Governor of the National Bank of Ukraine.
The measures put in place by the National Bank of Ukraine are stipulated by NBU Board Resolution No 124 dated February 23, 2015 On Details of Some Foreign Exchange Transactions (hereinafter – Resolution No 124) and NBU Board Resolution No 130 dated February 24, 2015 On Amendments to Some NBU Regulations (hereinafter – Resolution No 130).
The measures put in place by the National Bank of Ukraine are stipulated by NBU Board Resolution No 124 dated February 23, 2015 On Details of Some Foreign Exchange Transactions (hereinafter – Resolution No 124) and NBU Board Resolution No 130 dated February 24, 2015 On Amendments to some NBU Regulations " (hereinafter – Resolution No 130).
Resolution No 124 envisages measures allowing for a tougher verification of foreign exchange purchase contracts on terms of advance payment. Additional verification is required to eliminate the possibility for economic entities to enter into sham contracts and agreements that destabilize the foreign exchange market. Thus, contracts worth between USD 50 thousand and USD 500 thousand shall be subject to a tougher verification and approval. The letter of credit payment method is required for banks' operations involving payments to settle clients' import contracts exceeding USD 500 thousand.
The provisions of Resolution No 130 adopted as part of the NBU's measures to prevent capital flight outside Ukraine and avert pressure on the foreign exchange market additionally stipulate that 1 day is given to banks to have contracts verified by the regulator.
The Governor of the National Bank of Ukraine emphasized that the measures put in place by the regulator apply solely to import contracts on terms of advance payment. "The move is seen as a way of tightening control of imports," summed up Valeria Gontareva.
She said that the National Bank of Ukraine is working on amendments to the Resolution to specify the provisions envisaged by Resolution No 130, in terms of where they apply to import contracts. The National Bank of Ukraine will provide all the clarifications needed to defuse tension in the foreign exchange market," said Valeriia Gontareva.
The Governor of the National Bank of Ukraine drew the public's attention to the fact that the measures put in place by the National Bank of Ukraine fall within its mandate assigned to it by the legislation and were agreed by the International Monetary Fund.