The National Bank of Ukraine pushes ahead with liberalization of FX regulations by easing restrictions that have become inefficient, the relaxation of which will not have a destabilizing impact on the interbank and cash segments of the FX market. Sustained favorable FX market conditions and balanced distribution of risks to the inflation projections enabled the regulator to take further steps towards easing of administrative restrictions in the FX market.
First, the NBU is lifting a ban on FX purchases if the customer’s own available funds held in accounts with banks exceed the equivalent of USD 100,000. Until now, a customer has been required to use his own FX holdings to settle his obligations.
Second, the regulator is lifting restrictions on transfers abroad by individuals related to non-commercial operations. Until now, individuals have been allowed to transfer up to the equivalent of UAH 150,000 per month (except in some cases).
Third, banks will be allowed to perform FX operations without limitation with regard to the group of the Classifier of Foreign Currencies and Investment Metals in both the interbank and international FX markets. Until now, banks have been authorized to perform FX operations exclusively with foreign currencies assigned to one group of the Classifier except for operations that are executed in the interbank and international FX markets to settle obligations under import contracts, as well as transactions involving the purchase of foreign currency of the first group of the Classifier that are executed in the international FX markets.
The lifting of these restrictions will allow banks greater flexibility in managing their own liquidity and improve the banks' foreign exchange position.
The amendments to this effect are approved by NBU Board Resolution No. 44 of 30 May 2017 On Amendments to Some NBU Regulations. The provision lifting restrictions on transfers abroad by individuals related to non-commercial operations shall come into effect from 12 June 2017. Other amendments approved by this resolution shall come into effect from 31 May 2017.
However, given the need to preserve FX market stability, the NBU has decided to keep in place the 50 percent surrender requirements for FX proceeds as received from abroad by legal entities.
In early April 2017, the NBU eased surrender requirements from 65% to 50% to make it easier to operate for Ukrainian exporters that need to that import inputs for production with the purpose of exporting finished goods. Given that surrender requirements set out by paragraph 2 of NBU Board Resolution No. 410 of 13 December 2016 will remain in effect through 15 June 2017, the NBU Board issued a separate Resolution No. 45 On the Imposition of Surrender Requirements of 30 May 2017. This requirement shall come into effect from 16 June and will remain in effect through 13 December 2017 inclusive.
FX controls will be relaxed further as long as favorable macrofinancial prerequisites are in place and in line with the New currency regulation concept.