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The NBU's restrictions close the access of Ukrainian businesses to Western capital markets and settlements with creditors

Currency easing from the National Bank of Ukraine does not solve the problems of big business. This is stated in a column by Oleksandr Vodoviz, Head of the Office of Metinvest Group CEO, for Ekonomichna Pravda.

«Ukrainian business has been operating under strict currency restrictions for more than two years, which the National Bank introduced immediately after the Russian invasion of Ukraine. Initially, this helped stabilize the financial system of the warring country, and over time, the regulator began to ease currency controls,» the article says.

The largest package of easing was introduced in May 2024 – for the first time since 2022, businesses were allowed to withdraw currency abroad to pay loans and dividends. At the same time, this decision turned out to be very limited and does not allow businesses to develop due to the introduction of limits on transfers of $4 million per year.

«Big business has been waiting for this decision for a long time, but cannot use it because it does not take into account the specifics and scale of our work. At the end of last year, Metinvest’s loan portfolio was about $2 billion, and 95% of its borrowings were made in the West. We do not have access to Western capital markets, but we have obligations to our creditors and have to pay $250-300 million annually,» the author notes.

The situation is similar for most large companies in Ukraine’s economy, including Ferrexpo, ArcelorMittal Kryvyi Rih, and Interpipe. Each company has a loan portfolio exceeding a billion dollars, and none of them can borrow abroad.

To ensure loan repayments, companies must look for non-trivial solutions. Currently, Metinvest is raising trade finance through its sales offices abroad, meaning that long money is being replaced by short money.

«This cannot go on for long. It will lead to a series of defaults, which will affect the country’s ratings as a whole. We understand that the NBU wants to prevent massive outflows of funds abroad. But the regulator has all the tools to control the flow of funds, which, if necessary, will stop the illegal outflow of capital,» Ekonomichna Pravda quoted him as saying.

The problem for Ukrainian business is not only limited access to credit resources, but also to financing that allows it to cover military risks.

«We believe that international financial institutions and our partners could help find an acceptable solution in this situation. «Metinvest, for its part, is communicating with the Ministry of Economy on the possibility of raising funding for these purposes under the Ukraine Facility, which has an investment component of €7 billion,» Vodoviz summarizes.

Metinvest is one of the largest investors in Ukraine’s economy. In 2023, including its associates and joint ventures, the company paid UAH 4.2 billion in taxes and fees to the budgets of all levels in Ukraine. The amount of payments increased by 1.7 times compared to the same period last year. The company was recognized as one of the largest investors in Ukraine in 2022-2023 by Forbes.