The enactment of the law involves abolition or mitigation of over two dozen restrictive measures on the country’s currency market.
Deputy Governor of the National Bank of Ukraine (NBU) Oleh Churiy says the regulator does not expect financial system shocks in Ukraine as a result of the simultaneous lifting of two dozen restrictions on the forex market from February 7, 2019, when Law of Ukraine “On Currency and Foreign Exchange Transactions” comes into effect.
“We allow banks to do a lot more than other market participants because they are now under close supervision and operating within the National Bank’s limits. Therefore, we don’t see any risks of some volatility on the part of the banking system,” he said at a roundtable in Kyiv on January 22.
Churiy recalled that banks, under the law, would be able to buy investment securities across the world, conduct derivative transactions, or so-called non-deliverable forwards, to hedge their risks.
“But I emphasize once again that all these transactions will not cause any pressure on the market, because banks are under supervision,” he added.
Among the relief for businesses, he noted the doubling of the terms of settlements under export-import contracts, the possibility of opening accounts abroad, and receiving loans from non-residents.
Individuals will be able to purchase currency online and transfer funds abroad without opening an account. In addition, licenses for investing abroad will be canceled, while limits on such transactions – expanded.
“We are not opting for full liberalization, because the NBU’s second task – after maintaining price stability – is to ensure financial stability. That is, the main thing for us is that the removal of restrictions doesn’t provoke negative consequences for the market. Therefore, we have a liberalization road map to follow,” the NBU official said.
UNIAN memo. Law of Ukraine “On Currency and Currency Transactions” that had been passed by the Verkhovna Rada, Ukraine’s parliament, came into force on July 7, 2018. It shall be put into effect on February 2019.
The enactment of the law involves abolition or mitigation of more than two dozen restrictive measures in Ukraine’s foreign exchange market.
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