Dynamics of changes in discount rate of NBU
NBU
The Board of the National Bank of Ukraine (NBU) on 8 March 2022 decided to purchase war bonds for the amount of UAH 20 billion due to the need to finance the Armed Forces of Ukraine and for the duration of martial law.
“At the same time, the NBU will only provide limited financing for the critical expenses of the government. This will allow to minimize the risks of high inflation and disrupting macrofinancial stability and will facilitate quick return to market-driven operation of economy and financial markets after the war,” the central bank said on Tuesday.
This amount paid for war bonds constitutes approximately 1.3% of the total amount of Ukraine’s state budget expenditures for 2022.
The NBU said that the NBU is not a solo or even main sponsor of the government expenses.
“Despite the war, Ukrainian enterprises pay their taxes and large amounts are donated by people to support the Army. Our international partners also provide massive military, financial and humanitarian assistance,” the regulator said.
The central bank said that the NBU will take a separate decision if the further financing of critical expenses is required. It will take into account the military situation, social and economic standing of Ukraine, situation in financial markets and public finances, as well as other sources of budget financing.
“Lending to the government is a temporary measure taken by the NBU due to martial law. After the war is over and the economy is back to operating on market-driven principles, the NBU will return to its standard inflation-targeting regime with a floating exchange rate and will be reinstated the ban of financing the government,” the National Bank said.
The regulator said that the Verkhovna Rada of Ukraine has amended the laws in order to allow these transactions between the NBU and government. Namely, it has decided temporarily for the duration of martial law to waive Article 54 of the Law of Ukraine on the National Bank of Ukraine that prohibits the NBU from granting loans to the state.
The National Bank of Ukraine (NBU) condemns the decisions of businesses and people in the current difficult situation to set prices for goods and services in foreign currencies, in particular in dollars or euros.
“Setting prices in Ukraine in foreign currency is illegal. Such actions are not only immoral in a war, but are also a direct violation of Ukrainian legislation,” the National Bank said in a statement on Thursday.
The NBU recalled that the hryvnia as a national currency is the only legal tender on the territory of Ukraine and must be accepted by all individuals and legal entities without any restrictions throughout the country and for all types of payments in accordance with Article 35 of the Law “On the National Bank of Ukraine”.
The regulator clarified that, in particular, he became aware of cases of setting prices for rental housing in euros in Ukraine, which violates the law.
The National Bank of Ukraine (NBU) has opened a current account for humanitarian purposes to help Ukrainians affected by Russian aggression, the press service of the regulator said on Tuesday.
According to the report, the account is meant for charity contributions from Ukraine and from abroad.
“To streamline the inflows of funds as humanitarian aid to Ukrainians affected by the war, the NBU has opened an account for the Ministry of Social Policy to accumulate charitable contributions for social needs in wartime,” the press service said, citing Governor of the National Bank Kyrylo Shevchenko.
He said that unlike the special account that has been opened to finance the needs of the Armed Forces of Ukraine, money from this account will be used to help those hardest-hit by the war with Russia.
For foreign currency remittances:
UA823000010000032302338301027 currencies USD, EUR, GBP
For EUR remittances:
BENEFICIARY: National Bank of Ukraine
BENEFICIARY BIC: NBUAUAUXXXX
IBAN DE05504000005040040066
PURPOSE OF PAYMENT: for crediting account 32302338301027
BENEFICIARY BANK NAME: DEUTSCHE BUNDESBANK, Frankfurt
BENEFICIARY BANK BIC: MARKDEFF
BENEFICIARY BANK ADDRESS: Wilhelm-Epstein-Strasse 14, 60431 Frankfurt Am Main, Germany
For USD remittances:
BENEFICIARY: National Bank of Ukraine
BENEFICIARY BIC: NBUA UA UX
BENEFICIARY ADDRESS: 9 Instytutska St., Kyiv, 01601, Ukraine
ACCOUNT NUMBER: 400807238
BENEFICIARY BANK NAME: JP MORGAN CHASE BANK, New York
BENEFICIARY BANK BIC: CHASUS33
ABA 0210 0002 1
BENEFICIARY BANK ADDRESS: 383 Madison Avenue, New York, NY 10017, USA
PURPOSE OF PAYMENT: for crediting account 32302338301027
For GBP remittances:
BENEFICIARY/RECIPIENT NAME: National Bank of Ukraine
SORT CODE: 60-92-42
ACCOUNT NUMBER: 0080033041
GB52CHAS60924280033041
REFERENCE FOR CREDITING ACCOUNT: 32302338301027
BENEFICIARY BIC: NBUA UA UX
BENEFICIARY ADDRESS: 9 Instytutska St., Kyiv, 01601, Ukraine
BENEFICIARY BANK NAME: JP MORGAN CHASE BANK NA, London
BENEFICIARY BANK BIC: CHASGB2L
BENEFICIARY BANK ADDRESS: 125 London Wall, London EC2Y 5AJ, UK
Since the stabilization of the foreign exchange market, the National Bank has bought $600 million, First Deputy Prime Minister – Minister of Economy Yulia Svyrydenko said.
“The National Bank is now buying funds (from the foreign exchange market), has already bought $600 million. We can state that the panic in the foreign exchange market has passed,” she said at a meeting of the Congress of Local and Regional Authorities in Kharkiv.
At the same time, she indicated that by the end of 2022 inflation is expected to stabilize and reach the target of 5%.
Since January 2022, the National Bank of Ukraine (NBU) has been coordinating the positions of the chairman of the board (sole executive body), members of the board, chief accountant, chairman and members of the supervisory board of insurance companies from January 2022 in accordance with license terms, the regulator has told Interfax-Ukraine.
“Persons in these positions do not require the appropriate approval before the expiration of their tenure,” the NBU said in a statement.
In addition, the law on insurance from January 1, 2024 introduces separate requirements for the management of the insurer, namely the chairman of the supervisory board, his deputies and members of the supervisory board, the chairman of the board (director general), his deputies and members of the board (directorate), chief accountant. In relation to these persons, as well as the chief risk manager, chief compliance manager, chief internal auditor and responsible actuary of the insurer, qualification requirements for business reputation and professional suitability are established. In respect of the independent director of the insurer, independence requirements are also introduced. Qualification requirements will be determined at the level of the normative legal act of the NBU.
The chief risk manager, chief compliance manager, chief internal auditor, responsible actuary, as well as individual heads of the insurer – the chairman of the board (director general), chief accountant, chairman and members of the supervisory board – will take office after receiving the approval of the National Bank. With regard to other managers, insurers will be able to either obtain approval before they are appointed/elected to a position, or submit documents for approval to the NBU within one month after appointment/election to the position.
In addition, the law on insurance introduces requirements for the collective suitability of the supervisory board and collegiate executive body of the insurer, which will also be effective from January 1, 2024. Collective suitability means that the members of the supervisory board or executive body have the general/cumulative knowledge, skills, professional and managerial experience to the extent necessary to understand all aspects of the insurer’s activities, adequately assess risks, make informed decisions, etc.
The National Bank will establish the requirements and procedure for assessing the collective suitability of the supervisory board and the executive body. The NBU will carry out an appropriate assessment taking into account the size of the insurer, the volumes and types of operations carried out by it, the organizational structure, the risk profile, etc. The regulator also determines the existence of collective suitability when considering the package of documents for obtaining a license. Based on the results of such an assessment, the National Bank will have the right to demand changes in the personal composition of the supervisory board or the executive body.
