Ukraine central bank relaxes restrictions on foreign cash purchases

The board of directors of the National Bank of Ukraine
(NBU) has approved higher limits for banks on foreign cash purchases for their
own needs, Deputy Head Dmytro Sologub announced on Aug. 3. In particular, the
NBU has allowed the purchase and sale of foreign currency and banking metals
within a limit of 1% of regulatory capital per day (0.5% limit previously).
“This step will expand the possibility for banks to manage their foreign
currency liquidity and will reduce the NBU presence at the ForEx market,”
Sologub said. The new rules take effect today.

Alexander Paraschiy: The NBU
keeps easing ForEx rules amid quiet exchange rate tendencies. Lifting the limit
on purchasing foreign currency will create more room for maneuvering and should
increase turnover at the ForEx, but the step in essence is rather minor.

A full-fledged launch of a ForEx futures market is
needed to remove core ForEx restrictions at the Ukrainian market. In the
meantime, the NBU will keep advancing cautiously with very minor easing
measures.