The National Bank of Ukraine has eased a number of FX restrictions to encourage a more active participation of nonresident banks in the market for domestic government debt securities, increase FX inflows into the country, and support social initiatives intended to protect Ukrainian citizens. The NBU has also taken additional measures to prevent unproductive capital outflows form Ukraine to preserve the sustainability of the FX market.
On 12 August 2023, the NBU will introduce changes that apply to:
- transfers abroad for payment of pensions to Ukrainian citizens.
UKRPOSHTA PJSC as a designated postal operator will be able to make transfers to pay pensions and social benefits to Ukrainian citizens temporarily residing abroad.
This will support social initiatives intended to protect pensioners who are forced to stay abroad, and ensure the payment of pensions and social benefits guaranteed to them by the state.
As previously reported, the NBU in June 2022 also allowed the transfer of funds abroad to pay pensions to citizens under international agreements concluded by Ukraine with foreign countries.
- participation of nonresident banks in transactions with domestic government debt securities denominated in the domestic currency.
The NBU will allow the transfer of hryvnia funds to correspondent accounts of nonresident banks opened with Ukrainian banks for transactions with Ukrainian domestic government debt securities denominated in the domestic currency that occur with the participation of a nonresident bank.
According to the NBU’s estimates, these changes will facilitate a more active participation of nonresident banks in transactions with hryvnia domestic government debt securities. At the same time, due to the restriction on the conversion of these funds into foreign currency and their transfer abroad, said changes will not put more pressure on the FX market.
- fund transfers abroad by commodity exchanges to repay the security deposits to participate in trading
Commodity exchanges will be able to transfer funds to a nonresident in order to repay the amount of the security deposits previously paid by the nonresident to participate in trading. At the same time, these funds can be reimbursed only at the expense of funds previously transferred by a nonresident from abroad to participate in trading on a commodity exchange. As a result, the foreign currency will not be purchased, so the pressure on the FX market will not increase.
Instead, such changes will help ensure that exchanges meet their liabilities to traders, which in turn will help increase FX inflows to Ukraine.
- currency supervision by banks over the resident’s compliance with the deadlines for settlements under import transactions.
The NBU has determined that banks will not be able to complete currency supervision of an import transaction if funds are fully or partially repaid to the importer from a nonresident’s account opened with a Ukrainian bank.
The relevant change is necessary to prevent the unproductive outflow of foreign currency abroad, which will allow to protect Ukraine’s international reserves and stability in the FX market.
The relevant amendments and a number of other clarifying amendments were approved by NBU Board Resolution No. 96 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022 dated 10 August 2023, which comes into effect on 12 August 2023.