The National Bank of Ukraine (NBU) has published the last of the seven draft regulations that will lay the groundwork for the new liberal FX regulation system as provided for by the Law of Ukraine On Currency and Currency Operations.
The aim of the draft Regulation on implementation of the safeguard measures is to counter crises. This document will be temporary effective – until the final transition to free FX operations.
The Regulation should set no new FX restrictions, while extending the opportunities to transact certain FX operations. This includes the following items:
- doubling the time limit for settlements under commodity export and import operations up to 365 days
- introducing the automated system of e-limits instead of individual licenses for certain currency operations on funds transfers by residents abroad
- simplifying the FX supervision of FX purchase and sale operations in the amount of UAH 150,000 in the equivalent
- extending the list of available currency operations with banks, including currency swaps and non-deliverable forwards
- enabling online purchase of foreign currency and investment metals by individuals in the amount of up to UAH 150,000 in the equivalent per day
- permitting purchase of foreign currency and investment metals by legal entities without physical delivery in the amount of up to UAH 150,000 in the equivalent per day
- permitting transfers by individuals abroad in the amount of up to UAH 150,000 without opening an account.
Furthermore, the document prolongs the effect of several restrictions that are effective as of now after the Law of Ukraine On Currency and Currency Operations comes into force. This includes the following items:
- restricting repatriation of dividends in the foreign currency abroad in the amount of EUR 7 million per month and repatriation of investment (sale of unlisted shares and corporate bonds) in the amount of EUR 5 million per month
- prohibiting hryvnia loans to nonresidents
- receiving external loans through a single bank
- conducting FX purchase in the interbank market to fulfil the liabilities under foreign economic contracts through a single bank and under the terms of T+1
- prohibiting FX purchase without liabilities under foreign economic contracts or with the loan funds
- retaining FX supervision of operations on offsetting the liabilities
- retaining the surrender requirement to sell 50% of foreign currency proceeds to legal entities.
The above safeguard measures will be cancelled once macroeconomic conditions in Ukraine are improved in line with the liberalization roadmap developed jointly with the International Monetary Fund. The NBU stays committed to its end goal, which is to lift all restrictions in the FX market and switch to the free capital movement.
Please send your comments and suggestions on the Regulation on implementation of safeguard measures to [email protected] up to and including 21 December 2018.
Taking into account the results of the public discussion, the NBU Board will approve final versions of all seven regulations. The final versions will be published no later than 30 days before the day the Law On Currency and Currency Operations takes effect, that is, before 7 January 2019.
For reference
The structure of the new FX regulation will comprise seven new key regulations:
● No. 1: the FX market structure and rules for trading in foreign currency and investment metals
● No. 2: the procedure of foreign currency purchase and transfer within Ukraine and abroad
● No. 7: the procedure for meeting the settlements deadlines established by the NBU