Ukraine central bank cuts foreign currency sales requirement for exporters

The National Bank of Ukraine (NBU) reduced on Sept. 22 the required level of sales in foreign currency revenue for exporters to 75% from 100%. The requirement was previously increased on Aug. 21 to 100% from 50% to stabilize the ForEx market.

Alexander Paraschiy: The recent hryvnia volatility – after the NBU tightened all possible means of ForEx speculation – showed that the regulator was excessive with its administrative measures. Effectively, the requirement to sell 100% of export revenue scared off exporters, who delayed the clearance day (regulations allow 90 days for payments on export operations) as part of what only bolstered the foreign currency deficit at the market. It is not clear whether this step back will calm the ForEx market but it’s reassuring that the NBU realized that administrative measures are not a panacea for treating ForEx volatility.