The National Bank of Ukraine (the “NBU”) continues to ease FX restrictions, with a view to developing business, reviving economic activity, and raising money for reconstruction and economic recovery in Ukraine.
More specifically, from 21 June 2023, the NBU will give residents the possibility to make transfers abroad to service and repay new external loans, the funds from which will be credited from abroad after 20 June 2023 to borrowers' accounts in Ukrainian banks.
Residents will be allowed to conduct the above transactions if they meet the following requirements:
- the transfer of money abroad with the view of paying interest (including commissions, fees and other payments related to the servicing of external loans) cannot exceed the maximum interest rate of 12% per annum
- in order to discharge their obligations on a loan that was issued for a term no longer than three years, borrowers are only permitted to transfer their own FX currency (including the currency they raised through loans from nonresidents)
- in the case of loans that were issued for a term longer than three years, during the first three years, borrowers are only permitted to transfer their own FX currency (including the currency they raised through loans from nonresidents) with a view to repaying such loans. That said, borrowers are allowed to purchase FX to pay interest, commissions, fees and fines. Starting from the fourth year, they will also be permitted to buy FX to repay the loan itself.
- borrowers are not allowed to transfer money abroad to repay their loans before they fall due.
The requirements imposed by the NBU will offset the risks of nonproductive capital outflows. As a result, the outflows resulting from this easing will have only a limited impact on international reserves and the FX market, while businesses will be allowed to obtain new external loans. What is more, this will provide international partners with additional opportunities to finance the recovery of the Ukrainian economy.
The above amendments were approved by NBU Board Resolution No. 77 , dated 20 June 2023, On Amendments to NBU Board Resolution No. 18, dated 24 February 2022. The amendments will come into effect on 21 June 2023.