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The National Bank of Ukraine says it is pressing ahead with relaxing temporary forex restrictions given the favorable interbank foreign exchange market conditions, according to the NBU website.
The NBU relaxes restrictions for banks and their customers, reads the report, adding that these changes include the following:
The regulator has allowed authorized banks to perform their own operations with financial derivatives for which the underlying asset is foreign currency or its exchange rate on the stock exchanges. This move will extend the list of FX operations, enable banks hedge FX risks, and thus to reduce pressure on the interbank FX market.
Read alsoPolitical tensions trigger psychological pressure on FX market: NBUThe National Bank has allowed banks participating in international payment systems to purchase and transfer foreign currency based on individual licenses issued by the NBU for the purpose of placing a security deposit in foreign currency on accounts of international payment systems held abroad. Currently, legal entities may purchase and transfer foreign currency based on individual licenses up to the equivalent of $50,000 per calendar month. This move will enable banks to meet their liabilities to international payment systems and ensure the execution of settlements using payment cards issued by international payment systems for their customers (VISA, MasterCard).
The central bank has set a single deadline for all banks to bring the total long open foreign exchange position in line with the limits set by the NBU. Up until now, banks have been given one year to implement an action plan agreed with the NBU to address above-the-limit total long open foreign exchange position. From now on, banks will be required to implement this action plan by Jan 1 2019.
Read alsoNBU says inflation growing as projectedThe NBU has also expanded the opportunities for resident banks to purchase foreign currency in the interbank market. Currently, bank clients are allowed to perform such operations if the total FX amount held in their accounts is less than the equivalent of $25,000. The NBU has expanded the list of exclusions from the rules that disregard FX account balances. From now on, FX holdings on client’s accounts shall be disregarded in the calculation but shall be used to make payments against payment orders that are not required to be entered into the relevant registers on the date of FX purchase. Similarly, FX amounts that will be used, together with foreign currency purchased from the market, to settle import bills shall not be included in the calculation of FX holdings.
The NBU Board believes that the relaxation of FX restrictions will not hinder positive developments observed in the FX market since end-September on account of a favorable external environment, which were interrupted by relatively short periods of turbulence.
The appropriate amendments to this effect have been approved by NBU Board Resolution No. 402 of Nov 22, 2016 On Amendments to NBU Board Resolution No. 386 of Sep 14, 2016. This resolution shall come into effect from Nov 23, 2016 and remain in force through Dec 15, 2016 when the current crisis-response Resolution No.386 expires.