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Currency: total and manual control

01:37, 05.03.2015
yurasumy March 4, 2015 Something like this should have been expected. Those spokes The National Bank was putting in wheels of currency buyers, such as extension of the deadline for applications submission and necessity to obtain permits certificates, could have worked for 4 or 5 days. Then things would have returned to what they had been. That’s why a new regulation twisting the interbank’s arms just had to appear. The National Bank forbade Ukrainian companies to buy currency at the interbank for foreign payments if they already had currency funds of $10 thousand or more on their accounts. This is what says the regulation N160 of the National Bank of Ukraine sent all over the banking system. ‘You won’t manage to circumvent this requirement. According to this document, all clients will have to provide all the information about all their currency accounts in Ukraine: how much they have on their currency accounts and in which banks. We’ll send this information to the National Bank. There, having entered all of it into the common database, they will see that the same enterprise has a certain number of accounts’, commented on the innovation to the Vesti Vasiliy Nevmerzhitsky, a chancellor of the Chairman of the Eurobank Board. There are only three exceptions of this rule. Firstly, having currency you’ll be allowed to buy it at the interbank if the dollar and euro are already immobilised, i.e. they’re collateral for loans, but it’ll have to be confirmed by an appropriate certificate from the creditor bank. Secondly, if currency accounts are in a troubled bank, i.e. there is a regulation of the National Bank recognising it as insolvent or introducing a temporary administration of the National Bank in it. The third exception is about the currency placed on accounts before 4 March (the date when this regulation comes into force). Besides, the regulator forbade legal entities to buy currency in order to transfer it abroad on accounts in foreign banks and also to repay foreign loans and pay membership fees in foreign organisations. A company is supposed to have foreign exchange earnings - its own dollars and euros. At the same time the National Bank of Ukraine limited possibilities of legal entities and individuals to buy precious metals non-cash (it’s most likely about deals on purchasing metals without physical delivery): during one calendar week a bank will be able to buy no more than 3.216 troy ounces, or about 100 gram, of gold (as well as other metals like platinum, palladium, silver) for one client. They seek conversions. Another taboo is that banks are forbidden to provide people and businesses with UAH loans if currency on accounts is issued as collateral of them. ‘Thus we stimulate a process of conversion which many refuse hoping for an increase in the dollar rate. If an enterprise needs UAH funds for current operations let it sell dollars and euros it has at the interbank and get the national currency in such a way. The National Bank hopes thereby to increase currency offer and stimulate UAH strengthening’, Vladislav Cravets, a member of the Prominvestbank Board, told the Vesti. Manual control. At the same time the National bank obliged banks to daily form registers on foreign currency transactions, namely on purchasing and transferring currency abroad from clients’ accounts. In such a register there should be entered all transactions in the amount of $50 thousand and more and this information should be sent to the National Bank of Ukraine. ‘The regulator has taken all currency transactions in the country under total control. Every day it will find out about any whatsoever large purchase of currency and its transfer. It will also see the whole balance of such transactions within all banking system, so it will be able to harmonise it and eliminate discrepancies, namely align supply and demand at the foreign currency market’, explained to the Vesti Vasily Nevmerzhitsky. By the way, exporters are obliged to get certificates for currency transfers. Wherein to buy hard currency importers will still have to provide a tax certificate from the State Fiscal service (proving the absence of debts for contributions to the budget). Companies receiving some services abroad will have to provide a Privacy Act of expertise from the Ukrpromvneshexpertise; it takes on the average from 2 to 4 days to obtain it To buy and withdraw abroad funds received from selling securities of Ukrainian enterprises another certificate will be needed, namely that of the National Commission on securities and stock market proving that there is no evidence of fictitious nature of the transaction. Speculators are limited. At the same time the National Bank of Ukraine cut the possibilities of banks to speculate at the interbank to the limit and actually to trade at non-cash market as well, as it’s not only the overall amount of transactions banks are made to calculate and report on daily but the balance of transactions too. ‘The regulator set a rule that a bank can buy more at the interbank than it sold there only by 0.1% of its regulative capital. Herewith it left the old standard of currency position at the 1% level. It’s sure to hamper operations of banks at the non-cash market’, Vasily Nevmerzhitsky told the Vesti. Old restrictions are prolonged. As it had promised at a conference with Chairmen of Board of 40 banks the National Bank prolonged, with its regulation N160, all old restrictions on operations of the population from tomorrow to 3 June 2015. It means that as before an individual won’t be able to buy cash currency on one passport for more than 3 thousand UAH (now it’s about $100). Neither will he be able to remove more than an equivalent of 15 thousand UAH from his foreign currency account and more than 150 thousand UAH from his UAH account. The National Bank also prolonged for exporters the requirement of mandatory sale of 75% of currency earnings. P.S. From now on the junta will never refuse the manual control of the currency market. It won’t save the economics of Ukraine. The scenario of its collapse will be just a little bit different. Source