Ukraine central bank cancels limits on dividends repatriation

The National Bank of Ukraine (NBU) decided to cancel the limit on dividend repatriation by
Ukrainian companies with foreign capital starting from July 10, its press
service reported on July 9. The decision is in line with the NBU road map on
foreign currency market liberalization, which aims to improve the investment
climate in the country.

In 1H19, Ukrainian companies repatriated dividends for
USD 1.3 bln (20% yoy decline) out of which USD 1.0 bln (13% yoy decline) was
purchased on Ukraine’s ForEx market, the NBU reports. Making 4% of the total
demand for foreign currency purchases, dividends repatriation has no
significant effect on the market.

Evgeniya Akhtyrko: The NBU is
moving fast on removing one more barrier to foreign currency movement in the
country. Together with the recent cancellation
of the compulsory sale of foreign currency receipts by
exporters, this decision demonstrates the NBU’s increasing confidence in the
country’s macroeconomic stability.

Ukrainian companies with foreign capital now have more
flexibility in their decision making. However, creditors might be a little more
concerned about increasing risks in terms of a company’s liquidity, as the
company’s shareholders might increase dividend payments and reserve less cash
for other payables.