The National Bank of Ukraine has eased a number of FX restrictions to support domestic producers and improve the business environment in Ukraine. The introduced changes will not have a significant impact on the exchange rate and the level of international reserves.
The FX liberalization measures, effective 21 December 2024, cover a range of areas.
First, the NBU has eased restrictions on the sale and purchase of investment metals.
Following requests from the business community and a thorough analysis of the potential impact of this decision on the FX market, the NBU has allowed legal persons and sole proprietors to purchase and sell investment metals without physical delivery for cashless hryvnias.
From 20 December, businesses will be able to conduct the relevant transactions subject to the following conditions:
- the need to execute a transaction is justified by the production activities of such companies (for businesses engaged in jewelry manufacturing)
- companies/entrepreneurs were engaged in jewelry manufacturing before the full-scale invasion, which is confirmed by relevant documents.
The changes will help to ensure stable operation of domestic producers in the jewelry industry, reduce the volume of imports of manufactured jewelry, and ease pressure on business production costs due to the ability to make direct purchases of raw materials.
Second, the NBU has extended permission for nuclear operators to purchase foreign currency.
The NBU has allowed nuclear operators to conduct FX purchase transactions without taking into account balances in foreign currency received no later than 31 October 2024 under a loan agreement with a non-resident creditor, the guarantor of which is a foreign export credit agency/foreign state through its authorized person/foreign entity, in which a foreign state is a participant (shareholder).
The amendments are aimed at maintaining uninterrupted nuclear fuel supplies, which is important for the operation of nuclear power plants and, accordingly, for Ukraine's energy security.
Third, the NBU continues to unify approaches to the payment of Eurobond coupons by Ukrainian businesses.
In addition to the current possibilities, the NBU has updated the rules allowing Ukrainian companies to reimburse non-residents for expenses incurred by making Eurobond coupon payments. The rules have been optimized so that all Ukrainian companies that attracted funding for projects in Ukraine through the issuance of Eurobonds have the same opportunities to reimburse non-residents.
Such transfers can be made only at the expense of own foreign currency, subject to a number of conditions set forth in the NBU resolution. The changes will not have any adverse impact on the FX market, but will increase the likelihood of new capital inflows to Ukraine.
Said changes were introduced by NBU Board Resolution No. 155 On Amendments to NBU Board Resolution No. 18 dated 24 February 2024 dated 21 December 2024, and effective 20 December 2024.
In 2024, thanks to the easing of FX restrictions, Ukrainian businesses have been able to service a part of the coupon payments on Eurobonds. Specifically, domestic companies have been able to:
- repay principal and interest on “new” loans from non-residents (received after 20 June 2023)
- pay overdue interest on “old” external loans (received before 20 June 2023) accumulated for the period from 24 February 2022 through 30 April 2024 within the limit of EUR 1 million per quarter, and make scheduled interest payments from 1 May 2024 without any limitation on the amount
- pay dividends abroad over the established limit of EUR 1 million per month to ensure the regular coupon payments or compensation for already paid coupon payments on Eurobonds (subject to certain requirements and at the expense of their own foreign currency).