NBU changes rules for buying foreign currency for businesses to prevent capital outflows

The National Bank of Ukraine (NBU) has changed the rules for buying currency for businesses to prevent capital outflows.

This follows from a statement by the NBU, the Ukrainian News agency reports.

The NBU optimizes a number of currency restrictions to prevent unproductive capital outflows to protect Ukraine's international reserves and preserve the stability of the foreign exchange market.

Yes, from February 21, 2024, changes in a number of areas will come into effect.

First, the conditions for buying currency by business have been clarified.

Today, for calculations in foreign currency, a business must first use the foreign currency available to it and then, if necessary, buy it on the foreign exchange market of Ukraine.

Foreign currency transactions are also available to enterprises on the terms of "swap" for the purchase and sale of foreign currency if the first part of the transaction involves the purchase of foreign currency by the bank from the client.

In order to ensure that the relevant transactions are not used to circumvent current currency restrictions, the NBU clarifies the conditions for the purchase of currency by enterprises.

So, from February 21, when buying foreign currency by a business, banks will take into account not only funds in foreign currency placed on the client's current and deposit accounts but also information about the client's unfinished foreign exchange transactions with banks on the terms of "swap," according to which the first part was carried out transactions (from the sale of the bank's foreign currency by the client).

For this purpose, on the date of purchase of foreign currency, legal entities will need to provide the bank with information on the foreign currency sold by them under the first part of foreign currency transactions on the terms of "swap" (currency, term of the transaction) according to unfinished agreements with banks.

It will be provided additionally, along with information about available funds in foreign currency on current and deposit accounts.

Secondly, the specifics of currency supervision by banks on the deadlines for settlement of export transactions have been clarified.

Currently, there is a rule according to which banks can complete the currency supervision of residents' compliance with the settlement deadlines for export operations after the funds received from a non-resident for goods have been credited to the resident's current account in the bank if these funds were transferred from abroad.

In order to stimulate the return to Ukraine of foreign currency earnings from the export of goods, the NBU specifies the specifics of currency supervision by banks.

Starting from February 21, banks will be able to complete currency supervision of relevant transactions only if the funds from a non-resident are received in foreign currency.

Instead, transfers in hryvnias will not be grounds for ending the bank's currency supervision.

These and other changes were introduced by the resolution of the board of the NBU of Ukraine dated February 20, 2024, No. 24 On Amendments To Resolution Of NBU Board dated February 24, 2022, No. 18, which will enter into force on February 21, 2024.

As the Ukrainian News agency earlier reported, the NBU adjusted the official exchange rate of the hryvnia by 25% to UAH 36.5686/USD on July 21.

From August 6, 2022, the NBU canceled the restriction, according to which banks and non-banking institutions had to buy cash currency from the population at a rate no lower than the official one.

The NBU allowed banks to sell more currency to the public.

The NBU has been implementing managed exchange rate flexibility since October 3.

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