The National Bank of Ukraine has given an update about the various limitations introduced to cross-border transactions. It cites its reason as a quest to counter the unproductive outflow of funds from Ukraine. The country has been under martial law for several months. The new restriction implies that citizens will only be free to purchase products or assets exchangeable for cash immediately. It is also important that they buy assets linked to quasi-cash transactions.
Focus on limitations
The restriction puts a limit to about UAH 100,000 every month. The figure translates to about $3,300 a month. This set limit will also apply to the peer-to-peer transactions involved in cross-border. The institution has given out directions to those that want to use the non-cash transactions. It asks such people to use payment cards, but they must be the ones belonging to accounts opened using foreign currency.
The central Bank stipulates everything that falls under quasi cash transactions. It mentions the payment of traveler’s checks, purchase of cryptocurrencies, replenishment of electronic wallets, and opening FX or brokerage accounts. At the time Russia was deploying its troops in Ukraine, reports came out about the performance of Hryvnia. Reports showed the Ukrainian Hryvnia at its best. Analysts said it was at its record highs.
The essence of the changes
The Bank speaks about the modifications it puts in place and their impact. It expects the changes to make things better in the foreign currency market. It says the modifications are essential because they form the basis for eliminating restrictions in the future. The Bank also mentions that the changes are necessary because it is the only thing to do to lower pressure on its international reserves.
Matters have been looking good for the export-import trades in the foreign currency segment. It is a change that started towards the end of March. However, it was necessary to pay for transactions using the various international payment systems. Settling such purchases exerted immense downward pressure on the exchange segment.
The National Bank admits it is in a difficult situation but says the changes could spark an impressive dynamic.