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NBU Takes Additional Measures to Stabilize FX Cash Exchange Situation

NBU Takes Additional Measures to Stabilize FX Cash Exchange Situation

To further stabilize the situation around the exchange of cash foreign currency, the National Bank of Ukraine is expanding the list of exceptions from current administrative restrictions.

Specifically, starting 1 July 2023, the NBU has enabled nonbank financial institutions to withdraw domestic and foreign currency from their bank accounts without limits on withdrawal amount so that they can resupply themselves or their standalone units with cash.

This will help expand the supply of wear-and-tear-free FX banknotes in the cash FX market, where people can buy and sell foreign currency. Furthermore, allowing NBFIs to withdraw cash hryvnias without restrictions will enable these institutions to maintain their hryvnia liquidity at the right level, which is important for their capability to accept FX cash from individuals.

In this way, the NBU has generated significant momentum for the further stabilization of cash foreign currency exchange conditions. In particular, thanks to the introduced changes, NBFIs will have uninterrupted access to FX cash without major wear-and-tear damage. The banks have already been enjoying the availability of such FX banknotes. Accordingly, this will have a positive effect on the condition of FX cash available to individuals.

For the granted permission to be used exclusively for the purpose of ensuring FX market stability, the NBU has defined the conditions that NBFIs must meet.

Specifically, the amount of hryvnia or FX cash withdrawn by an NBFI should not exceed the amount that was previously credited to its bank account, in particular:

  • NBFIs have the right to credit to their hryvnia accounts the money received through currency exchange transactions and the sale of cashless foreign currency.
  • To FX-denominated accounts, NBFIs can credit the funds received from currency exchange transactions and as compensation for FX banknotes accepted for cash collection purposes.

As previously reported, the NBU in June also implemented a set of measures to resolve the issue of exchanging worn FX banknotes. The NBU has canceled the list of minor-wear-and-tear signs on banknotes, met with market participants, and tightened the monitoring of their compliance with its requirements.

These measures have already had a certain stabilizing effect. Effective 1 July 2023, the expansion of the list of exceptions from the current administrative restrictions is the next step in the direction of stabilizing the situation.

This measure was approved by NBU Board Resolution No. 88 On Amendments to NBU Board Resolution No. 18 dated 24 February 2022 dated 30 June 2023, which takes effect on 1 July 2023.

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