During a weekly meeting held at the National Bank of Ukraine, the participants discussed the situation in the money market. Thus, most bankers attending the meeting acknowledged that the situation had showed signs of stabilizing. According to them, an increase in the banks' deposit base in the national currency was recorded the previous week.

Governor of the National Bank of Ukraine Valeriia Gontareva informed the bankers that the supply of foreign exchange outpaced the demand for it, both in the cash and interbank market, thus enabling the National Bank of Ukraine to replenish the net international reserves by almost USD 579 million. "Going forward, these funds might be used to carry out foreign exchange interventions should the demand for foreign exchange rise, or should the market experience an upsurge in volatility," she noted.

At the meeting, the Governor of the National Bank of Ukraine also informed the bankers that the funds from the first tranche of around USD 5 billion under the IMF’s EFF had been credited to the accounts of the National Bank of Ukraine. She emphasized that achieving financial stability is one of the main criteria to be fulfilled to remain on track with the program. The increase in the gold and foreign exchange reserves contributes to achieving this goal. "Under the IMF’s EFF, Ukraine's foreign exchange reserves will have expanded to reach USD 17 billion by the end of 2015," added the Governor of the National bank of Ukraine.

The meeting participants paid special attention to discussing the provisions of the Law of Ukraine No 211-VIII On Amendments to the Tax Code of Ukraine and Some Other Legislative Acts of Ukraine dated March 2, 2015 (hereinafter – the Law). The banking community and market participants raised their concerns over the lack of a clear-cut procedure to collect and administer levies under the Law. The Law, inter alia, provides, that from March 13, 2015, income arising from transactions in foreign exchange valuables (except for securities) involving the transfer of ownership of these foreign exchange valuables is subject to a military levy of 1.5%. Given the relevance of this issue to bankers, Mykola Chemeruk, Director of Department for Tax and Customs Policies and Accounting Methodology of the Ministry of Finance of Ukraine had been invited to participate in the meeting. According to him, in order to settle this issue, the Minister of Finance of Ukraine is engaged in consultations with representatives of the National Bank of Ukraine, the State Fiscal Service of Ukraine and banks. Detailed clarifications will soon be given to the market participants. It is clear now that this levy shall not apply to all the banking transactions that fall into the category of currency exchange operations.     

In addition, the prospects for reducing further the cap on cash payments were discussed at the weekly meeting. Governor of the National Bank of Ukraine Valeriia Gontareva pointed to the need to step up the efforts of the banking community in this area, hold consultations among bankers and, drawing from international practice, establish the appropriate cap on cash payments. "The initiative to reduce the cap on cash payments will contribute to the development of cashless payments, and enable it to attract additional funds to the banking sector," said Valeriia Gontareva, adding that this step would contribute to reducing the shadow economy. The regulator also suggested exploring the possibility of issuing the NBU deposit certificates denominated in the foreign currency.