The National Bank of Ukraine moves ahead with a relaxation of temporary anti-crisis measures put in place in 2014-2015 to stabilize situation in the money and FX markets of Ukraine. On 25 May 2016, NBU Board issued Resolution No. 332 On Amendments to NBU Board Resolution No. 140, dated 3 March 2016, was issued to this effect.
Second, the NBU has shortened the provisioning period for banks to deposit funds in UAH required to purchase foreign currency upon clients’ instructions. Up until now, banks have been allowed to purchase foreign currency for their clients not earlier than the third business day following the previous provisioning period (mode Т+2). From now on, banks shall be allowed to purchase foreign currency for their clients on the next business day (mode Т+1).
As before, these transactions are subject to approval by the NBU within a given timeframe to prevent nonproductive capital outflow abroad. However, up until now, the timeframe for depositing funds in UAH has been the same as the duration of the verification process for contracts. From now on, their duration may differ.
Banks shall be allowed to purchase foreign currency on the second business following the submission to the NBU of information required to secure the confirmation of a transaction. Additionally, customers will have two options. The first option for customers is to transfer funds in domestic currency to a separate account one day prior to the NBU’s approval of a FX purchase transaction and purchase foreign currency on the day of the approval by the NBU. Another option for customers is to transfer funds in domestic currency to a separate account prior to the date of FX purchase transaction following the receipt of approval for a FX purchase transaction from the NBU. This approval will remain valid for 30 days.
At the same time, authorized banks will submit to the NBU information on the total amount of funds in domestic currency deposited to enable banks purchase foreign currency via the System for Confirmation of Deals in Ukraine’s Interbank Foreign Exchange Market. Banks will be required to submit this information by 6.15 p.m. simultaneously with information on the total amount of funds subject to mandatory sale scheduled for the next business day.
This move will make it easier for banks to purchase foreign currency and will help increase liquidity available to businesses to finance current operations. At the same time, this move will ensure the NBU’s to forecast demand for and supply of foreign currency and help prevent excessive hryvnia exchange rate fluctuations triggered by temporary demand-supply mismatches in the FX market.
The amendments shall take effect from 1 June 2016.