Ukraine central bank eases restrictions on dividend repatriation

The National Bank of Ukraine (NBU) introduced a number
of changes under its program of ForEx market liberalization, as reported in its
press release on March 2. The central bank increased the limit on dividend
repatriation to USD 7 mln per month per dividend-paying company. The change is
retroactive and applies not only to the dividends to be paid for 2017, but also
to dividends accrued in 2013-16.

The monthly limit on dividend repatriation was 
USD 5 mln in 2014-16 and USD 2 mln in 2013. Nevertheless, the NBU admits that
the cap on dividend repatriation is still needed in order to minimize its
influence on the interbank ForEx market and price stability.

The NBU also allowed the Ukrainian borrowers to repay
their external loans ahead of schedule, limiting this amount to USD 2 mln per
month. The regulator also lifted the requirement on the compulsory sale of 50%
of foreign currency receipts for some operations of exporters.

Evgeniya Akhtyrko: These are
positive moves that should benefit Ukrainian businesses with foreign ownership,
borrowers with foreign loans and some exporters. The NBU is consistent with its
ForEx liberalization program and is demonstrating confidence in its projections
on foreign currency flows under the balance of payments.

In our view, these adjustments are not likely to
result in significant turbulence on the ForEx provided there is sufficient
currency inflow under the BoP financial account. The positive effects related
to the improvement of the business climate will definitely outweigh some
adverse effect of currency outflows.