In its ongoing efforts to relax foreign exchange (FX) restrictions, the National Bank of Ukraine (NBU) has implemented significant changes as of December 1, 2023. These adjustments are crucial for maintaining macrofinancial stability, safeguarding international reserves, and addressing the pressing needs of defense, the economy, and citizens. The decision was influenced by input from financial market participants, aligning with priority requirements.
- Unrestricted Cash Foreign Currency Sales to Households by Banks and Nonbank Financial Institutions: The NBU has completely removed restrictions on the amount of cash foreign currency that banks and nonbank financial institutions can sell to households. This strategic move is anticipated to narrow the gap between cash and cashless exchange rates, thereby fostering stable exchange rate expectations and enhancing the overall sustainability of the FX market. From an accounting perspective, this measure aims to streamline currency transactions and mitigate potential disruptions.
- Facilitation of Fund Transfers by Export Credit Agency (ECA): The NBU has granted authorization for the Export Credit Agency (ECA) to facilitate fund transfers for reimbursing expenses related to insurance and reinsurance agreements with foreign insurance (reinsurance) companies. This move is particularly relevant in the context of the armed aggression against Ukraine, ensuring risk insurance for maritime navigation safety, stable shipping, and sustainable exports. The amendments also empower the ECA to utilize letters of credit for transaction settlements, aligning with the requirements outlined in the Cabinet of Ministers Resolution No. 1140.
- Expanded Cross-Border Transfers for Citizens Needing Treatment/Rehabilitation Abroad: The NBU has broadened the scope of services eligible for cross-border transfers for citizens, including combatants requiring treatment or rehabilitation due to the war. This encompasses additional services integral to the treatment/rehabilitation process in foreign medical institutions.
- Authorized Payments for Student Study Abroad Conditions: NBU Board Resolution No. 155 introduces amendments allowing payments for services essential to creating conducive conditions for students studying abroad. This includes payments for accommodation, student visas, transfers, meals, insurance, and emergency medical services.
In summary, these modifications implemented by the NBU underscore its commitment to addressing economic challenges, fostering stability, and aligning financial practices with the evolving needs of various stakeholders.