The National Bank of Ukraine allows companies to buy foreign currency to repay loans to non-residents

The National Bank of Ukraine (NBU) has eased foreign exchange market restrictions for businesses, which were introduced in 2014-2015 to stabilize the national currency, namely by allowing companies to buy foreign currency to repay loans to non-residents provided the availability of own foreign currency funds on accounts.

NBU Resolution No. 386, which was published on the regulator`s website, comes into force on September 15 and is valid until December 15, 2016, inclusive.

According to the NBU, resident companies, which have received credits or loans from non-residents, will be able to buy foreign currency to pay off their debts even if they hold over $25,000 in own foreign currency funds in their accounts, provided the targeted use of currency funds purchased, namely the settlement of debt liabilities.

The NBU says this measure will help simplify conditions for currency purchases with a view of carrying out timely settlements of external liabilities by Ukrainian businesses, and it will not result in increasing volatility on the interbank foreign exchange market.

However, the NBU notes that it has extended the number of other foreign exchange market restrictions for another three months, including the mandatory sale of 65% of foreign currency earnings and a 120-day period of settlements under foreign trade contracts.

The NBU adds it will continue the gradual liberalization of currency regulations taking into account the situation on credit and currency markets, as well as the Ukrainian economy as a whole.

As UNIAN reported earlier, the National Bank of Ukraine announced the easing of administrative restrictions on the foreign exchange market this year.

Since August 10, the hryvnia exchange rate against the dollar has been gradually decreasing by 5-10 kopecks daily, exceeding 25 UAH/USD, as compared to a level of 24.7-24.9 UAH/USD during the previous two months. The situation improved after the announcement of the International Monetary Fund, Ukraine`s key creditor, that the Fund would consider Ukraine issue during a meeting of the IMF Executive Directors on September 14. The Ukrainian national currency has strengthened.

The regulator said the situation on the currency market in Ukraine has stabilized. In particular, the NBU reported the excess of foreign currency supply over demand on the interbank foreign exchange market on September 13, and for the first time since August 9 it bought US$ 19.7 million worth of currency, after holding seven currency auctions in August-September to sell currency to support the hryvnia. It is reported that during the auctions the regulator has sold US$200 million worth of foreign currency.

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