The NBU has taken steps to reduce demand in the FX market’s cash segment and protect international reserves, and clarified some provisions, simplifying the delivery of humanitarian aid to Ukraine and expanding the prospects of conducting foreign economic activities for Ukrainian businesses.
In particular, changes apply to the following areas:
Sale of cashless foreign currency to individuals
As of 1 October 2022, the NBU has increased a monthly limit from UAH 50,000 to UAH 100,000 (in the equivalent) for the purchase of cashless foreign currency by individuals for the purpose of making three-month or longer-maturity deposits.
Such changes will allow to additionally redirect the retail demand for foreign currency from cash to cashless, as the banks’ cashless FX sales – which, unlike cash FX transactions, are made at the exchange rate that is close to the official NBU exchange rate – are more convenient and secure.
As previously reported, the NBU on 21 July 2022 allowed banks to sell cashless foreign currency to individuals, provided such funds are placed on term deposits. The number of banks that offer such a service is gradually increasing. In particular, in August and September, this service was provided by some of the largest banks.
Businesses can send available FX cash abroad to sustain the operation of their own units
As of 1 October 2022, the NBU has allowed businesses to transfer funds to accounts of their foreign units and branches, provided they simultaneously meet the following requirements:
- such transfers are permitted only for sustaining the operation of the relevant branches or units
- a monthly amount of remittances must not exceed a quarter of the total amount of funds that were transferred abroad by businesses for funding the operation of their units in 2021
- transfers must be made by businesses at the expense of their own foreign currency.
Given that businesses will make said transfers using available foreign currency, this permission will not only put no pressure on Ukraine’s international reserves, but also improve the operating conditions for Ukraine’s businesses promoting their products in the external markets.
Transfers from hryvnia payment cards to cards of foreign banks
As of 5 October 2022, the NBU will reimpose a ban on the P2P transfers from hryvnia payment cards of Ukrainian banks to cards of foreign banks.
The NBU’s decision to permit the P2P transfers from hryvnia payments cards that was adopted in April 2022 allowed Ukrainians to support in the most difficult times their loved ones who were forced to flee to other countries due to the full-scale russian military aggression against Ukraine. At the same time, after more than seven months of martial law, such transfers, originally intended to support Ukrainians abroad, are losing their effectiveness, while the risks of their use to bypass restrictions are on the rise. Therefore, said measure will enhance the protection of Ukraine’s international reserves, which are especially important for the smooth operation of the economy and defense procurements.
It should also be noted that Ukrainians will still be able to transfer funds abroad to pay for their education (to the accounts of educational institutions), treatment at healthcare institutions, transportation of patients, to cover expenses related to the death of citizens abroad, and deliver alimony payments. In addition, the NBU has taken into consideration the requests of the public and allowed, as of 1 October 2022, cross-border remittances for tuition to be made into accounts of nonresident legal entities authorized by the educational institution to accept funds.
Furthermore, Ukrainians can transfer funds between hryvnia payment cards of Ukrainian banks, regardless of the customer’s country of location. The NBU will also retain the permission to carry out P2P transfers from FX payments cards of Ukrainian banks to payments cards of foreign banks within a monthly limit of UAH 100,000 (in the equivalent), which is common both for said transactions and for quasi cash transactions.
Currency supervision when importing humanitarian aid to Ukraine
Taking into account the requests from banks and charities, and results of the joint work on the issue with other state authorities, the NBU has introduced, as of 1 October 2022, additional grounds for discontinuing the currency supervision of the compliance with deadlines for settlements for goods that are imported to Ukraine as humanitarian aid.
The NBU has defined a list of documents that allow banks to discontinue the currency supervision of such import transactions. The documents include a declaration with the list of goods that are recognized as humanitarian aid, and documents that confirm the transfer or acceptance of the imported humanitarian aid by its recipient.
In addition, the NBU has allowed the transfer of funds to a nonresident under commission, agency, or power of attorney agreements through the sale, starting 24 February 2022, of services or works included into the list defined by the Cabinet of Ministers of Ukraine in Resolution No. 153.
The relevant amendments and a number of other clarifying amendments were approved by NBU Board Resolution No. 211 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022 dated 29 September 2022. Most provisions of the document take effect on 1 October 2022, except for the reimposition of the ban on the P2P transfers from hryvnia payment cards to cards of foreign banks (effective 5 October 2022).