Banks and stock exchanges will now be able to sell unlimited cash dollars and euros to the public. The Central Bank will lift all relevant restrictions as of December 1. This is done to minimize the difference between cash and non-cash exchange rates and stabilize exchange rate expectations.
Starting from December 1, 2023, the Central Bank has once again relaxed foreign exchange restrictions, canceling all restrictions by banks and non-bank financial institutions on the possible volume of cash sales of foreign currency to the public. This was stated in a message from the NBU.
According to NBU chairman Andriy Pyshny, such currency liberalization takes into account the needs of maintaining macro-financial stability, maintaining international reserves and meeting the needs of defense, economy and citizens.
Therefore, starting from December 1, there will be four important changes in foreign exchange transactions.
Important
What exactly did the Central Bank adopt: 4 important changes
- All restrictions on banks and non-bank financial institutions have been lifted about possible volumes of cash foreign exchange sales to the population. This is done with the aim of minimizing the difference between cash and non-cash exchange rates, stabilizing exchange rate expectations and increasing the stability of the foreign exchange market.
“Why is this important? Because the de facto existence of such restrictions is one of the reasons for the multiplicity of exchange rates. Therefore, we have reason to expect that removing them will allow us to maintain the difference between exchange rates: cash and non-cash at a minimum level. As a result, this will strengthen the stability of the foreign exchange market,” he said. explained NBU chairman Andriy Pyshny.
- Export Credit Agency (ECA) allowed to transfer funds abroad for reimbursement or compensation of expenses under insurance and reinsurance contracts with foreign insurance (reinsurance) companies. This was done specifically to ensure sustainable export of Ukrainian products through Ukrainian ports. Such a step should safeguard the risks during Russia’s war against Ukraine and guarantee the safety of navigation and the stability of maritime transport.
Moreover, it is now possible to use the ECA letter of credit payment method. Resolution No. 1140 of the Cabinet of Ministers of Ukraine dated November 2, 2023 “Relevant actions will be carried out to implement the requirements of the decision on the allocation of funds from the reserve fund of the state budget to ensure its security. to promote the stability of navigation and shipping.”
“In this way, we will guarantee the possibility of insuring risks to ensure the safety of navigation and, therefore, support the stability of maritime transport even in the conditions of a full-scale war,” added Andrei Pyshny.
- After this Ukrainians will be able to transfer money abroad to pay for servicesIt is about the treatment and rehabilitation process in foreign health institutions. This includes payment for consultation, diagnosis and hospital care.
The Central Bank expanded its list of services, For payment allowed cross-border transfers to citizens, including combatants who need treatment or recovery outside Ukraine as a result of Russia’s armed attack on Ukraine. Relevant additional services regarding the treatment or rehabilitation process in health institutions abroad have been added to the relevant list.
- Now cross-border transfers are permitted to pay for education-related services. In particular: for accommodation, obtaining a visa for the period of study, transfers from the hostel to the training offices, meals, insurance, medical services in case of emergency medical care.
We would like to add that these reductions and other clarifying changes were made by the “Decision of the Board of Directors of the Central Bank of Ukraine” dated November 30, 2023 No. 155 “On Amending the Decision of the Board of Directors of the Central Bank”. Decree No. 18 of the Decree of Ukraine dated February 24, 2022 comes into force today, December 1, 2023.
Let us recall that in November the NBU reported a decrease in the volume of gold and foreign exchange reserves due to their active intervention in the interbank market. Meanwhile, Ukrainian experts do not expect that the controlled exchange rate flexibility regime introduced in October will actually support the hryvnia but limit the outflow of reserves.
Source: Focus
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