Effective 21 May 2022, the NBU has lifted restrictions on setting the exchange rates at which authorized institutions can sell cash foreign currency to customers. Prior to 21 May, these exchange rates were not allowed to deviate from the official exchange rate by more than 10%.
The central bank has also abolished similar restrictions on setting the exchange rates at which banks debit hryvnia funds from the accounts of clients that make hryvnia card-based payments abroad.
"The removal of the restrictions on the exchange rates at which banks can sell currency to the public will improve the operating conditions of legal market participants. This will help facilitate competition, increase the liquidity of the legal segment, and reduce the volume of illegal transactions. All of this will make the FX market more stable and assist in narrowing the range of exchange rate fluctuations in the market’s cash segment," said NBU Deputy Governor Yuriy Heletiy.
In addition, the NBU has temporarily lowered – to the equivalent of UAH 50,000 – the monthly limit on cash withdrawals abroad from hryvnia accounts opened with Ukrainian banks. This cap previously stood at the equivalent of UAH 100,000. This reduction will ease the risk of unproductive capital outflows and curb opportunities for speculation and circumvention of currency restrictions, thus protecting Ukraine’s international reserves.
Individuals will continue to be able to withdraw cash abroad from FX accounts opened with Ukrainian banks, within a daily limit of UAH 100,000. Nor do these changes apply to the use of payment cards abroad to pay for goods, works, and services. Most of these card-based payments can continue to be made without restriction. Therefore, despite the lowering of the limit on cash withdrawals outside Ukraine from hryvnia accounts, individuals will still be able to meet all of their urgent needs.
The NBU has also forbidden banks to make transactions that violate the restrictions imposed by the central bank or that can aid in evading these restrictions. Furthermore, banks are temporarily not allowed to:
- transfer funds to make loans to nonresidents (except for financial institutions)
- extend hryvnia loans to legal entities to repay FX loans
- switch from foreign currency to the hryvnia when implementing FX loan agreements concluded with legal entities (except for banks).
These changes are also intended to restrict unproductive capital outflows and maintain gold and FX reserves at sufficient levels.
The changes outlined above were introduced by NBU Board Resolution No. 102 On Amendments to NBU Board Resolution No. 18 On the Operation of the Banking System Under Martial Law dated 24 February 2022, dated 20 May 2022. The document is effective 21 May 2022.