NBU allows Ukrposhta to transfer pensions abroad, eases some restrictions for non-residents but tightens FX import control

MOSCOW. Aug 11 (Interfax) - The National Bank of Ukraine is easing a number of foreign currency restrictions to encourage participation of non-resident banks in the government bonds market and trading on commodity exchanges aa well as support for pensioners abroad, while strengthening foreign exchange oversight for certain import transactions to prevent unproductive capital outflow, Ukrainian media quoted an NBU press release as saying.

Ukrposhta, the Ukrainian postal service, will be able to make transfers to ensure the payment of pensions and cash benefits to Ukrainian citizens abroad.

The NBU also allowed the transfer of hryvnia funds to the correspondent accounts of non-resident banks opened with Ukrainian banks for transactions with domestic Ukrainian government bonds denominated in the national currency, to which a non-resident bank is a party.

"The NBU estimates such changes should encourage the more active participation of non-resident banks in transactions with government hryvnia bonds. At the same time, because restrictions on the conversion of these funds into foreign currency and their transfer abroad are still in place, this will not increase pressure on the currency market," the NBU said.

In another relaxation, the NBU has allowed Ukrainian commodity exchanges to transfer funds abroad to a non-resident for the return of collateral in order to participate in trading, but only from funds previously transferred by a non-resident from abroad to participate in such trading.

"Foreign currency will not be purchased, so this will not increase pressure on the currency market. But such changes will ensure that exchanges honor their obligations to trading participants, which will increase the inflow of foreign currency to Ukraine," it said.

Banks will not have the opportunity to carry out foreign currency controls in full for a transaction to import goods if funds are fully or partially returned to the importer from a non-resident's account opened with a Ukrainian bank.

"This change is needed to prevent unproductive outflow of foreign currency abroad, which will protect Ukraine's international reserves and currency market stability," the regulator said.

The changes were ushered in by a resolution of the National Bank of Ukraine executive board dated August 10, 2023.