At the beginning of this week the National Bank of Ukraine ("NBU") approved further restrictions regarding certain operations on the foreign exchange market. In particular, the amendments to banking legislation introduced through the Resolutions No. 124* and No. 130** dealt with the purchase of foreign currency and payments for import operations.

Restrictions on foreign currency purchases and payments for import operations

The Resolution No. 124 that came into effect on 24 February introduced the following restrictions on operations exercised by banks:

  • it is prohibited to purchase foreign currency by the order of clients out of the UAH funds obtained by the clients as loans except the purchases aimed at fulfillment of clients' obligations under the consumer loan agreement before the bank
  • it is prohibited to make advance payments in foreign currency for import of goods under foreign economic agreements total amount of which exceeds USD 50,000. The above prohibition is applicable in case NBU has informed the bank on the non-confirmation of the possibility to make such payments. An exception from the prohibition is settlements of due payments in the form of a documentary letter of credit
  • banks are obliged to make advance payments in foreign currency for imports of goods under foreign economic agreements total amount of which exceeds USD 500,000 exclusively in the letter-of-credit form. At that the letter-of-credit form shall satisfy specific requirements established by NBU.

The restrictions in clauses 2 and 3 above are applied both to the operations ordered by the clients and the banks' own operations, and refer to the foreign economic agreements executed, inter alia, before the Resolution No. 124 came into effect.

Further restrictions on foreign currency purchases

Today the Resolution No. 130, which has prohibited banks to purchase foreign currency under orders of their clients, comes into effect. The Resolution No. 130 does not provide for any exceptions with regard to the clients, including the type of foreign currency to be purchased by those clients. At the same time, authorized banks are allowed to carry out their own purchases of non-cash foreign currency for UAH within fixed limits only. The said prohibition will be effective from 25 February through 27 February 2015.