The National Bank of Ukraine has brought the methodology for calculating the foreign exchange position in line with the international standards. On March 31, 2014, the Board of the National Bank of Ukraine passed Resolution No. 182 “On Bringing the Limits on the Open Foreign Exchange Position of the Banking System of Ukraine in line with the International Standards” (hereinafter – Resolution No 182).

The resolution comes into force on May 1, 2014.

Therefore, the National Bank of Ukraine has implemented the recommendations provided by the International Monetary Fund and the World Bank in the context of the financial sector reform.

Thus, the new resolution annuls NBU Board Resolution No 109 dated February 28, 2009, “On the Approval of the Methodological Recommendations for the Regulation on the Procedure for Setting the Open Foreign Exchange Position Limits by the National Bank of Ukraine and Surveillance over Authorized Banks' Compliance therewith” and approves the new methodology for the authorized banks.

This methodology provides for the provisions against possible losses arising from asset-side foreign exchange transactions to be gradually included in the calculation of authorized banks' (long/short) open foreign exchange position. The provisions will be included in the calculation in equal parts (which will be increased by 5% every moth) over the next 20 months according to the schedule approved by Resolution No. 182.   

The authorized banks are allowed to include the provisions in an amount exceeding interest rates shown in the schedule, but not exceeding the amount of indexed domestic sovereign bonds held in the bank's securities portfolio, in the calculation of the open foreign exchange position.

With a view to bringing the amount of bank's short open foreign exchange position in line with the limit set by the National Bank of Ukraine, the authorized banks may, at their own discretion, purchase the foreign exchange or indexed domestic sovereign bonds

At the same time, in order to avoid foreign exchange risks, the authorized banks are advised to take measures to switch from the foreign currency to the national currency when fulfilling obligations under a loan agreement.