The National Bank of Ukraine (NBU) has expanded liquidity management capacity for banks by decreasing minimum reserves that banks are required to hold in correspondent accounts with the central bank daily at the opening of the business day.

Before, banks were required to hold daily at the opening of the business day 40% of the amount of minimum reserve requirements to be maintained on a correspondent account with the central bank. According to the NBU Board’s decision, the requirement will be reduced to 0%.

Therefore, the provision has been cancelled regarding the permissible number of non-compliances with daily reserve requirements during three consecutive reserve maintenance periods. The reserve maintenance period remains unchanged, from the 11th day of the current month till the 10th day of the next month.

In the future, banks will be required to maintain the minimum reserve requirements on average during a relevant period. Minimum reserve requirements remain as follows: 6.5 – for corporate and household demand deposits in the national and foreign currency, as well as for current account funds; 3.0 – for corporate and household term deposits in the national and foreign currency.

The above measure will enable banks to be more efficient in managing additional liquidity. Such flexibility in liquidity management will facilitate the development of the interbank money market in Ukraine.

The amendments to this effect were approved by NBU Board Resolution No. 752-D of 23 November 2017 that become effective from 25 December 2017.