NBU eases restrictions on cash FX market

According to Ukrinform, this was reported by the NBU press service.

"Since April 21, 2023, the National Bank of Ukraine has been easing a number of administrative restrictions to create conditions for launching the e-residency project and strengthening positive trends in the cash segment of the foreign exchange market, which have contributed to a significant narrowing of the spread between the cash and official exchange rates," the statement said.

It is noted that the NBU is consistently taking steps to minimize the multiplicity of exchange rates. This helps to increase the stability of the foreign exchange market and improve exchange rate expectations. To the same end, the NBU is expanding the ability of banks to sell foreign currency in cash to the public. Thus, starting from April 21, when calculating the amount of cash foreign currency that a bank can sell on the foreign exchange market, 120% of the vume of non-cash foreign currency purchases from the public will be taken into account, rather than 100%, starting from April 13, 2022. These changes are aimed at maintaining a favorable situation in the foreign exchange market.

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It is also noted that the NBU allows e-residents (after paying taxes in Ukraine) to transfer to their accounts abroad funds in foreign currency received on accounts in Ukrainian banks from non-residents (for services or works rendered). These changes will not put pressure on the foreign exchange market and Ukraine's international reserves, as such transactions will not invve the purchase of foreign currency – the transfer will be made at the expense of foreign currency received by the e-resident from abroad.

The implementation of the e-residency project will help attract additional revenues to the state budget, pularize Ukraine as a global IT brand, and improve Ukraine's position in international rankings. These mitigations, as well as a number of other clarifying changes, were introduced by Resution of the Board of the National Bank of Ukraine No. 53 "On Amendments to Resution of the Board of the National Bank of Ukraine No. 18 of February 24, 2022" dated April 20, 2023, which comes into force on April 21, 2023.

As reported, on April 1, 2023, the Law of Ukraine dated October 6, 2022, No. 2654-IX "On Amendments to the Tax Code of Ukraine and Some Other Laws of Ukraine on Peculiarities of Taxation of Business Activities of Electronic Residents" came into force. It allows foreign citizens and stateless persons who have acquired e-resident status and registered as individual entrepreneurs to conduct business and pay taxes in Ukraine without leaving their country of residence or stay.

As part of this project, on March 8, the NBU allowed e-residents to en current accounts for business activities in a bank with which the Ministry of Digital Transformation of Ukraine has entered into a relevant agreement. Allowing e-residents to transfer funds in foreign currency received from non-residents (after taxes) is also one of the steps that will allow the practical implementation of the project.