The National Bank of Ukraine has sharpened the criteria for selecting banks to participate in the FX intervention conducted in the form of a request for best quotation envisaged by the NBU Foreign Exchange Market Intervention Strategy for 2016-2020.

Up until now, the NBU has selected banks eligible to participate in these currency interventions based on the single criterion, regarding volumes of FX purchase and sale transactions with other interbank market participants  and the NBU, which was published in early November 2016.   Each quarter the NBU selected 20 banks that have performed the largest volumes of FX purchase and sale transactions in the previous quarter. The first list of banks eligible to participate in the FX intervention in Q4 2016, which were selected based on the transparent criterion, was published in early November 2016.

However, the NBU deems it necessary to expand the criteria to adopt a more impartial approach to the selection of banks eligible to participate in currency interventions conducted in the form of a request for best quotation.

From now on, based on the previous quarter results in terms of the volume of interbank market transactions, 20 top-ranked banks will be designated as eligible to participate in currency interventions conducted in the form of a request for best quotation. An overall composite rating is calculated based on the individual rating scores assigned to the bank on the basis of three criteria:

• the volumes of transactions performed by the bank involving the purchase/sale of foreign currency with other market participants and the NBU (the weight of position in the ranking included in the calculation of the overall rating stands at 50%); 
• the volume of transactions performed involving the purchase/sale of cashless foreign currency with bank’s customers (the weight of position in this ranking - 30%); and
• the size of the bank's assets (the weight of position in this ranking - 20%).

The amendments to this effect  have been approved by NBU Board  Resolution No. 1 of 5 January 2017 On Amendments to the Regulation On Procedure and Conditions of Foreign Exchange Trading. The amendments will come into effect from 6 January 2017.