Canceling the mandatory sale of foreign currency earnings

The National Bank of Ukraine has taken another significant step towards improving macroeconomic conditions and the gradual introduction of a free capital flow regime in Ukraine, by canceling the mandatory sale of foreign currency earnings. From June 20, 2019, the NBU excluded from the Provision on Measures for Protection and Determining the Procedure for Performing Certain Transactions in Foreign Currency a paragraph that obligated entrepreneurs to sell foreign exchange earnings in the interbank foreign exchange market.

The report on the adoption of measures of protection, promulgated by the National Bank of Ukraine in April 2019, clames that the mandatory sale of part of the revenues in foreign currency is one of the measures to protect the foreign exchange market. Later in a press release on June 18, 2019, the NBU brought statistics that, despite the fact that from March 1, 2019, the rate of sale of foreign exchange earnings was reduced from 50% to 30%, the business sold more than 90% of the currency in the interbank foreign exchange market.

The NBU is sure that, taking into account all the changes introduced in the currency legislation and the complete canceling of the mandatory sale of foreign currency earnings, Ukraine’s macroeconomics will not suffer from the negative consequences in case of currency devaluation. The canceling of the mandatory sale of foreign exchange earnings, together with the thirty measures to ease foreign exchange restrictions, are strategic objectives of the regulator that must provide a free movement of capital in the state, as evidenced by the “road map” of the canceling of foreign exchange restrictions, published by the National Bank of Ukraine in the report on taking protective measures.

These changes were approved by the Resolution of the Board of the National Bank No. 78 dated June 18, 2019 “On Amendments to the Regulations on Measures for Protection and Determining the Procedure for Performing Certain Transactions in Foreign Currency”.

The canceling of the sale of foreign exchange earnings by entrepreneurs is one of the strategic tasks of the NBU in the direction of currency liberalization and, as a result, the achievement of macroeconomic stability of the state.

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