NATIONAL BANK CANCELS CLAIM REQUIREMENT FOR MANDATORI SALE OF FOREIGN Exchange RECEIPTS

In order to further simplify business in Ukraine, the National Bank cancels the requirement for the mandatory sale of foreign exchange earnings.

  The norm, which obliged entrepreneurs to sell 30% of foreign exchange earnings in the interbank foreign exchange market, ceased to operate from June 20, 2019. Business receipts credited to their current accounts during June 19 are no longer subject to mandatory sale.

   Resolution of the Board of the NBU of 06/20/2019 “On Amending the Provision on Protection Measures and Determining the Procedure for Performing Certain Operations in Foreign Currency” of 78.06.2019, No. 78, which canceled the mandatory sale of part of foreign exchange earnings.

   This ruling is concise, but at the same time extremely important. One decision removed section No. ІІІ Regulation on protective measures and determining the procedure for carrying out certain operations in foreign currency, approved by the NBU Board Resolution No. 5 dated January 2, 2019, which previously established a requirement for the mandatory sale of 30% of foreign exchange earnings.

  Recall: the limit of mandatory sales fell to 30% of foreign exchange earnings from 01.03.2019. Earlier, 50% of receipts were sold on the foreign exchange market of Ukraine.

   The decree came into force on June 20, 2019 (as provided for in paragraph 4 of the document). Thus, the last time 30% of foreign exchange earnings were sold on the foreign exchange market on June 19, 2019 (when Section III of Regulation No. 5 was still alive). This is a part of the amounts received on the resident's distribution accounts 18.06.2019.

   But the receipts credited to such accounts on June 19, 2019, were no longer subject to mandatory sale.

   Regular currency easing, according to forecasts of the regulator, should not have a negative impact on macro-financial stability. According to statistics of recent years, when the standard for mandatory sale of foreign exchange earnings was 50%, and since March 1, 2019, when it was reduced to 30%, the business as a whole sold over 90% of foreign currency.

   That is, in fact, for the NBU the amount of foreign exchange earnings should not change, but the period when residents will sell such receipts has changed.

   The latter are no longer obliged to go "on the rolled-up rails", selling part of the currency when it arrives, which certainly gives more freedom to handle it.

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