The National Bank of Ukraine (NBU) passed Resolution No. 78, which entered into force on 20 June 2019 and canceled a previous regulation that required Ukrainian companies to sell 30% of their foreign currency reserves.
As a result, companies have the discretion to retain any amount of foreign or national currency. This Resolution addresses a series of new foreign currency and foreign exchange rules that were implemented at the beginning of 2019. As reported earlier, the new regulations contained significant restrictions that the NBU put in place as it assessed how monetary policy, Ukraine’s economic growth and other factors affected the market.
The most controversial restrictions included the prohibition to purchase foreign currency to distribute the dividends declared by Ukrainian companies and the requirement that exporters sell a portion of its foreign currency proceeds – both of which were nullified recently.
This change in foreign currency regulations opens new opportunities for Ukrainian business and its foreign partners and customers since Ukrainian exporters are now able to employ new financing instruments offered by international banks and other providers, and expand their use of cross-border loan facilities.
For more information on this Resolution and Ukrainian monetary policy, feel free to contact authors of this publication.
Resolution of the National Bank of Ukraine “On Amendments to the Regulation on Protection Measures and Determination of the Procedure for Conduct of Particular Foreign Currency Transactions” No. 78 dated 18 June 2019 (in Ukrainian).