NBU to allow F/X forward transactions as of end-Oct

The National Bank of Ukraine published yesterday an order dated August 12 that paves the way for foreign exchange forward transactions to be concluded by Ukrainian banks as of October 26. The NBU banned forward currency transactions in April as part of its measures to stabilize the hryvnya. Only banks that do not violate open F/X position limits will be allowed to conclude forward transactions. Forward transactions had been allowed in Ukraine since 2005, but were not widely used as the NBU capped the amount of transactions at no more than 10% of the bank’s regulatory capital. Mykyta Mykhaylychenko: This is definitely a positive step from the NBU, although it is too early to judge about how effective it will be. When forward transactions on the domestic FX market were allowed, their volumes were quite small because of regulatory limitations and the underdeveloped nature of the domestic financial market in general.