Banks to fund nonresidents in hryvnia and to transact currency forwards for domestic government bonds purchase

In order to encourage foreign investments to Ukraine, the National Bank of Ukraine (NBU) has authorized banks to provide short-term funding in hryvnia to nonresident legal entities for buying domestic government bonds.

As of 14 June 2019, Ukrainian banks can issue hryvnia loans to foreign companies and banks for aforesaid intended use, and to transact forward and swap contracts for the period not exceeding 14 business days.

“Newly launched link with Clearstream ICSD has lifted all technical barriers for the inflow of foreign investments in government bonds. By authorizing banks to fund such transactions, investors will plan better their participation in domestic government bond auctions. This will drive their interest to the Ukrainian market,” noted NBU Deputy Governor Oleg Churiy.

Also, in response to multiple requests from Ukrainian businesses, the NBU clarified that business entities can make settlements under foreign trade agreements both by foreign currency and hryvnia payment cards, if the transaction value is below UAH 150,000. The respective amendments were approved by NBU Board Resolution No. 77 On Amendments to Certain Regulatory Documents of the National Bank of Ukraine dated 13 June 2019.