Business news from Ukraine

NATIONAL BANK OF UKRAINE EXPECTS TWO TRANCHES OF $1.3 BLN EACH FROM IMF

The National Bank of Ukraine (NBU) expects that two tranches of the rest of $2.6 billion of the 14-month Stand-By Arrangement (SBA) of the International Monetary Fund (IMF) opened in December 2018 would arrive in 2019, Governor of the NBU Yakiv Smolii has said. “This year we expect two tranches of $1.3 billion each: one in May and another in September. Accordingly, these funds will be sent to foreign exchange reserves,” he said at a press conference.
The head of the NBU recalled that the first tranche of the SBA was $1.4 billion and was provided in December last year.
Smolii said that last year, thanks to $2.4 billion from international partners (the IMF, the European Union and the World Bank) in reserves, the country’s forex reserves increased by $2 billion and reached $20.8 billion – highest figure for the last five years.
As reported, on December 19, 2018, the Executive Board of the IMF approved a new 14-month SBA. The new SBA, with a requested access of SDR 2.8 billion (equivalent to $3.9 billion), will provide an anchor for the authorities’ economic policies during 2019.
A total of SDR 1 billion (around $1.4 billion) were provided at once, and the rest of the funds will be provided after the six month reviews.

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NATIONAL BANK OF UKRAINE COULD REDUCE NORM OF MANDATORY FOREX SALE FROM 50% TO 30%

The National Bank (NBU) could in the near future reduce the rate of mandatory sale of foreign currency earnings for exporters from 50% to 30% or cancel it completely, Deputy Governor of the NBU Oleg Churiy has said. “If we carry out another wave of currency liberalization in the near future, we will remove or reduce these restrictions. Perhaps, we will reduce mandatory sale from 50% to 30%, but this will depend on the macroeconomic situation. Perhaps, we will completely cancel it,” he said.
The NBU in the policy of gradual liberalization of the currency market focuses not on temporary restrictions but on macroeconomic indicators and possible consequences, he said.
According to the banker, the central bank considers the abolition of compulsory foreign exchange earnings for exporters to be among the priorities of currency liberalization along with the lifting of restrictions on the repatriation of dividends to foreign investors.

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NATIONAL BANK OF UKRAINE ASSESSES FIRST TRANCHE UNDER NEW IMF PROGRAM AT $1.5-1.9 BLN

The amount of the first tranche under the new Stand-By Arrangement (SBA) with the International Monetary Fund (IMF) could be $1.5-1.9 billion, First Deputy Governor of the National Bank of Ukraine (NBU) Kateryna Rozhkova has said. “We recently had a monetary briefing where the NBU Governor Yakiv Smolii said that the tranche could be received by the end of this year. As for the sum [of the first tranche], I think that it would be some $1.5-1.9 billion,” she told reporters at the BEPSinUA forum in Kyiv on Thursday.
As reported, the International Monetary Fund (IMF) staff and Ukraine have reached an agreement on economic policies for a new 14-month Stand-By Arrangement (SBA), which will replace the arrangement under the Extended Fund Facility (EFF), approved in March 2015 and set to expire in March 2019.
The agreement is subject to approval by the fund’s management and approval by its board of directors. The board’s meeting is expected to take place at the end of the year after the Verkhovna Rada adopts the national budget for 2019 in accordance with the recommendations of the IMF and the increase in gas and heating tariffs for households, reflecting market trends while maintaining support for low-income consumers.

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NATIONAL BANK EXPECTS FIRST IMF TRANCHE UNDER STAND-BY ARRANGEMENT TO BE PROVIDED THIS YEAR

Governor of the National Bank of Ukraine (NBU) Yakiv Smolii does not rule out that a first tranche under the new Stand-By Arrangement (SBA) from the International Monetary Fund (IMF) could arrive this year. “For the time being we cannot talk about exact deadlines, since the decision will be made by the IMF board. We expect it to take place in December, and we can expect to receive a tranche this year,” he said at a monetary briefing in Kyiv.
As reported, the International Monetary Fund (IMF) staff and Ukraine have reached an agreement on economic policies for a new 14-month Stand-By Arrangement (SBA), which will replace the arrangement under the Extended Fund Facility (EFF), approved in March 2015 and set to expire in March 2019.
The agreement is subject to approval by the fund’s management and approval by its board of directors. The board’s meeting is expected to take place at the end of the year after the Verkhovna Rada adopts the national budget for 2019 in accordance with the recommendations of the IMF and the increase in gas and heating tariffs for households, reflecting market trends while maintaining support for low-income consumers.

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NATIONAL BANK OF UKRAINE PLANS TO SETTLE CYBER DEFENSE IN SPHERE OF MONEY TRANSFER

The National Bank of Ukraine (NBU) plans to first settle the issue of providing the proper level of cyber defense and cybersecurity in the sphere of money transfer.
The respective initiative is contained in the draft resolution of the NBU approving the regulation on cyber defense and cybersecurity in payment and settlement systems, the text of which was posted on the regulator’s website for public discussion.
In particular, the draft resolution provides for determining the requirements for the payment market players in building an cyber defense and cybersecurity system, the procedure for detecting cyber attacks that reduce the reliability of payment and settlement systems, as well as the requirements for organizational and technical measures to ensure the protection of information and cybersecurity by the payment market players.
The regulator said that this document is based on the requirements and recommendations of national and international cybersecurity standards, as well as modern approaches to cyber defense and cybersecurity that are universally accepted in international practice.
The adoption of the draft resolution will allow minimizing the number cyber incidents in the sphere of money transfer, regulating the use of cybersecurity tools, increasing the reliability of the functioning and efficiency of payment and settlement systems, speeding up the modernization of payment systems, taking into account modern cybersecurity technologies.
Comments and proposals for the NBU draft document will be accepted until October 27.

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NATIONAL BANK OF UKRAINE TIGHTENS RESPONSIBILITY OF BANKS FOR INEFFICIENT RISK MANAGEMENT

The National Bank of Ukraine (NBU) intends to impose restrictions on certain types of bank operations in case if the bank’s risk management system is recognized as ineffective. The document comes into force on September 11, 2018. The regulator may also require the bank to suspend or terminate certain types of transactions.
The final decision will be made based on the evaluation of the viability of the bank’s business model, analysis of the provided actual and forecast balance sheet data, profit and loss statements, transactions with related parties, and regulatory capital components.

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