The National Bank announced the biggest monetary liberalization package since the beginning of the great war. It is expected that this will improve the conditions for doing business in Ukraine and access to new markets.
The National Bank has announced the biggest package of easing foreign exchange restrictions for businesses since the start of a massive war. The NBU reported this on Friday, May 3.
They noted that the purpose of these changes is to improve the conditions for doing business in Ukraine and the entry of domestic enterprises into new markets, as well as to support economic recovery and facilitate the flow of new investment in the country.
The changes concern several areas. Most of these will take effect on May 4th, only the ability to return the “new” dividends will start on May 13th.
The National Bank provides an opportunity for businesses to purchase and transfer foreign currency abroad to carry out operations in the import of goods and services.
In addition, the NBU provided an opportunity for businesses to purchase foreign currency and transfer funds abroad to pay airport and port taxes, fines, and membership fees.
Such changes will support Ukrainian manufacturers and provide opportunities for domestic businesses to enter new markets, including those where manufacturers in the aggressor country have been forced out due to sanctions.
This will accordingly contribute to a gradual increase in export earnings in Ukraine.
Businesses will be able to return dividends on corporate rights or shares abroad, accumulated based on operating results for the period starting in January of this year.
This relief does not apply to the payment of dividends from residual earnings from previous periods or capital reserves.
In order to reduce risks to macro-financial stability, the National Bank has set a monthly limit for the return of “new” dividends to the equivalent of 1 million euros.
Monitoring of compliance with this standard will be ensured thanks to the NBU automated information system “E-limits”.
Providing the opportunity to return new dividends will facilitate the flow of new investments to Ukraine, reduce the risks of curtailing the activities of enterprises with foreign capital and support the economy.
Legal entities and individual entrepreneurs will have the opportunity to transfer funds abroad for settlements under leasing or rental agreements without additional restrictions, as well as signing an agreement. Previously, such permission only applied to leasing or renting vehicles.
The corresponding changes will also allow businesses to pay off previously concluded agreements, which will actually make it possible to conclude new agreements and attract the necessary equipment to Ukraine to carry out business activities.
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The NBU simplifies the conditions for the purchase of foreign currency by residents for the purpose of servicing and paying “new” external loans, the funds of which were received in foreign currency from abroad after June 20 , 2023 in the accounts of borrowers in Ukrainian banks. .
In particular, the minimum period for using a “new” loan has been reduced from three to one year, when it is reached it is allowed to buy foreign currency to pay off such a loan. Accordingly, the ban on buying foreign currency to pay off “new” loans will be applied exclusively to pay off short-term loans for a period of up to one year.
In addition, the NBU will allow businesses to buy foreign currency to pay interest on “new” loans, regardless of the period of loan use.
All this will lead to an increase in the ability of Ukrainian enterprises to attract new external loans not only from official partners, but also from private investors.
Resident borrowers will be able to transfer funds abroad to pay interest payments on “old” external loans, which, according to the terms of the loan agreement, are due from February 24, 2022.
Within the framework of an agreement, for overdue interest payments, it is possible to transfer no more than 1 million euro equivalent per calendar quarter. However, this limit will not apply to scheduled future interest payments.
In order to protect macro-financial stability, additional conditions are provided for the following operations:
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absence of overdue debt under the relevant loan agreement as of February 24, 2022;
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prohibited to purchase and transfer funds through loans or advances received from residents;
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There is no provision for early enforcement of payments or restructuring of overdue payments.
These changes will reduce the probability of defaults of Ukrainian borrowers and provide more favorable conditions for the restructuring of external loans, as well as improving the conditions for attracting new capital of Ukraine.
The NBU will allow representatives of the offices of the international card payment system and foreign airlines to buy and transfer foreign currency abroad to the account of a non-resident – a legal entity whose interests are the representatives of This office is represented in Ukraine.
The monthly limit for carrying out such operations (by a representative office of a company) is set at the equivalent of 5 million euros.
Such changes, in particular, will contribute to the further development of non-cash payments in Ukraine.
Earlier it was reported that in April, Ukrainians increased their purchases of foreign currency by a quarter.
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Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.