NBU extends restrictions on monetary, currency markets due to risks to price, financial stability

The National Bank of Ukraine (NBU) has extended temporary restrictions in effect on the monetary, credit and currency markets due to risks to the price and financial stability, the regulator has reported on its website.

"The following restrictions are in effect: obligatory sale of 65% of income in foreign currency; 120 day term for settling goods exports and imports transactions, one day term for reserving hryvnias to buy foreign currency on the interbank currency market; a bank on early payment of credits issued by nonresidents; purchase of cash foreign currency by individuals equivalent to up to UAH 12,000 a day and the limit for withdrawing cash from the currency account in the amount of up to UAH 250,000 a day," the NBU said.

Deputy NBU Governor Oleh Churiy said that risks for achieving the inflation target in 2017 (8% plus/minus 2 percentage points) have grown. He said that vagueness has expanded due to political tension and the likelihood of a delay in provision of the official financing due to slow introduction of measures outlined in the IMF-funded program is increased.

"Today there are short-term systemic risks for financial stability linked to the possible non-observation of capitalization programs by some banks after stress tests," the NBU said.

The regulator confirms that if the risks decrease and favorable preconditions on the monetary, credit and currency markets and in the Ukrainian economy are seen, the central bank would continue gradually mitigate the temporary restrictions.

The central bank said that the NBU board has decided to make its resolution on settling the situation on the monetary, credit and currency markets in Ukraine with no expiration date.