The National Bank of Ukraine (NBU) has issued a clarification of the woirkings of its new foreign exchange control regime.
“The original NBU regulation contained some unclear wording with regard to the ways of cash settlement – which has been clarified now,” explains Bohdana Yefremova, Head of Custody at HVB Bank in Kiev. “However, some of our questions regarding repatriation and some tax issues still remain unresolved.”
However, Yefremova says that the NBU has made clear that foreign investors can now pay foreign currency to a securities broker; transfer foreign currency to an investor’s cash account with a custodian bank; pay foreign currency to a broker or transfer foreign currency to an investor’s cash account with a custodian bank, convert it into Ukrainian Hryvnia and then pay the local currency to the broker. In the case of trades between non-residents, cash settlement can be done via foreign banks.
Yefremova says that NBU has also confirmed that foreign investors are allowed to place deposits in foreign currencies with a minimum term of one year only, with no right of early withdrawal. No Hryvnia deposits can be offered at all.