Ukraine slightly liberalizes forex rules for importers

Thursday, April 28, 2016 - 19:57 (EEST) Section: Latest news

The National Bank of Ukraine (NBU) has liberalized forex rules for importers, having announced that foreign currency receipts in the form of loans borrowed from foreign banks to pay for imports are no longer subject to mandatory sale on Ukraine`s interbank forex market.
This is stipulated in NBU resolution No. 290, which is becoming effective from April 29 and will be in effect until June 8, 2016, inclusively.
The new rule will be applicable only to those cases when borrowed funds are transferred by a foreign lender bank directly to a nonresident exporter, i.e. when the funds are not transferred to a resident borrower`s current account at an authorized bank.
The regulator says that mandatory sale on the interbank forex market shall be applicable to funds to be taken by resident borrowers as foreign currency loans from nonresidents. This measure is expected to allow the real sector of Ukraine`s economy to take more loans from foreign banks.
As UNIAN reported earlier, the NBU announced the possibility of further measures to liberalize administrative restrictions on the local forex market after new loans from the International Monetary Fund arrive in Ukraine. In particular, the regulator announced plans to lift a ban on the repatriation of dividends following the evaluation of their volumes.
The current restrictions on the forex market include a limitation on the withdrawal of hryvnias at banks` cash desks and ATMs in the amount of UAH 500,000 (about $19,840 at the current forex rate) in hryvnias and UAH 50,000 ($1,984) in the foreign currency equivalent per one client per day. Individuals are allowed to buy cash foreign currency in the equivalent of UAH 6,000 (about $238) per day. Other restrictions are the mandatory sale of 75% of exporters` foreign currency earnings, a 90-day limit on the return of advance payments on agreements on imports, a ban on early repayments of loans by residents to nonresidents, a ban on the return of investment and transfer of dividends to foreign investors. What is more, Ukrainian banks should secure the NBU`s consent for the purchase of foreign currency if its sum exceeds $50,000 in the equivalent.