NBU eases currency restrictions for businesses

Starting January 14, the National Bank of Ukraine (NBU) is easing a number of currency restrictions and clarifying the specifics of currency regulation in order to support Ukrainian businesses. This is stated in a message from the regulator.

The NBU is introducing a new incentive “borrowing” limit to increase the flexibility of Ukrainian enterprises in managing funds attracted from abroad, creating a regulatory basis for facilitating the restructuring of “old” external loans.

The size of the “borrowing” limit will be equal to the amount of funds received under a loan or credit from abroad in foreign currency to the company’s account in a Ukrainian bank after January 1, 2026. Within this limit, businesses will be able to carry out a number of operations provided for by the incentive liberalization: repay old external loans received before June 20, 2023, and pay interest on them, pay for old imports, as well as finance their own foreign branches and repatriate dividends in excess of the established limit.

The NBU highlights the following features of the “borrowing” limit:

• in case of repayment of the principal amount of the loan, the maximum amount within the “loan” limit will be reduced accordingly;
• after transactions within the “borrowing” limit have been carried out, the transfer of funds from Ukraine to repay the principal amount of the loan is limited to the amount of the loan debt, reduced by the amount of transactions carried out within the limit;
• currency transactions within the “borrowing” limit are carried out at the bank where the business received the loan.

Other parameters of such loans must comply with the general requirements of the NBU for “new” borrowings from abroad, established by the relevant resolution: maximum interest rate not exceeding 12% per annum, no early repayment, with the possibility of paying interest and gradual repayment of the loan principal.

In addition, domestic sellers and manufacturers of goods will be able to transfer currency to the accounts of individuals in foreign banks to reimburse funds for returned/undelivered goods – the NBU has listed the conditions for such transactions.

In addition, the regulator has clarified the specifics of regulating currency transactions for exporters:

• the requirements regarding payment deadlines will not apply to goods exported under foreign economic agreements for which the Export Credit Agency has paid insurance compensation to the exporter. This measure will help stimulate exports of Ukrainian products, works, and services.
• the export of insurance services has been removed from the list of transactions to which the requirement to comply with payment deadlines applies.

We would like to remind you that in November last year, Serhiy Kuzmenko, Director of Finance and Economics at the Ukrainian industrial company Interpipe, called the NBU’s currency restrictions the main current challenge in the Ukrainian financial market.