The National Bank of Ukraine has taken further regulatory steps towards liberalization of the existing tough currency restrictions. The latter were imposed back in 2014 in order to mitigate the consequences of the worst economic and political crisis in Ukrainian history and stabilize the national financial system. However, the macro-economic stability achieved in 2016-17, relatively low inflation rates and certain progress in the cooperation with the IMF have encouraged the regulator to gradually soften the regulatory regime.
On April 13, 2017, the NBU approved Resolution No. 33, which became effective on April 14, 2017. The liberalization measures implemented by this Resolution include:
(i) permission to repatriate dividends accrued by foreign investors in 2016 (last year, the NBU already permitted the repatriation of dividends for the years 2014-15);
(ii) the increase to USD 5,000,000 of the general monthly limit of dividends permitted for repatriation;
(iii) permission to Ukrainian resident banks-borrowers to early repay loans granted by non-resident banks-lenders officially ranked as “A3” / “A-” by Fitch Ratings and/or Standard & Poor's, and/or Moody's;
(iv) permission to Ukrainian resident banks-borrowers to early repay loans granted by non-resident lenders out of funds derived from the placement of debt securities outside Ukraine;
(v) the increase from USD 1,000,000 to 5,000,000 of the pre-payment amount under cross-border import contracts which does not require the use of a letter of credit confirmed by a first-class foreign bank.
Earlier in April 2017 (Resolution No. 30 of April 4, 2017), the NBU reduced from 65% to 50% the threshold for the mandatory conversion of currency proceeds received by resident business entities on their bank accounts as well as increased from UAH 12,000 to 150,000 the daily limit for the purchase of cash currensy by one person.
Undoubtedly, the above steps are intended to improve the general investment climate in Ukraine and create more favorable conditions for the business of Ukrainian exporters and importers. They will send a positive signal to both the local and international business community. Further liberalization measures are awaited, but will depend on the development of both economic and political situation in the country.