Ukraine central bank keeps compulsory 50% sale of FCY proceeds

The National Bank of
Ukraine (NBU) decided at its semiannual review on Dec. 13 to keep the requirement on
business of the compulsory sale of 50% of foreign currency (FCY) proceeds, the
NBU board reported on its website. This current level remains an efficient
instrument for securing smooth FCY inflow and thus an important instrument for
ForEx stability, the statement said.

Recall in April, the
NBU lowered the required level of compulsory sales to 50% from 65%. In May, the
board preserved this level at its extraplenary session.

Alexander
Paraschiy: The
national currency is experiencing gradual depreciation pressure amid higher
fiscal spending and in line with a widening trade deficit. The hryvnia has lost
6.7% since Aug. 21, falling to UAH 27.27/ USD from UAH 25.44/USD.

What’s more, we expect the hryvnia to fall further to UAH 28.5/USD in
the upcoming weeks owing to the government’s traditional year-end fiscal
spending surge. So the decision to keep the level at 50% makes sense. We expect
liberalization moves after depreciation pressure eases.