Ukraine Central Bank Has Right to Control Scope of Hryvnia Sales

Ukrainian central bank will have the right to determine the amount and terms of obligatory sales of currency earnings after parliament approved a law to support the hryvnia.

The bill, prepared by the National Bank of Ukraine, was supported by 237 lawmakers in the 450-seat legislature. Under the new regulation, the central bank will determine how much foreign currency earnings companies will have to exchange into hryvnia on the interbank market and when. The introduction of obligatory sales “will increase the supply of foreign currency on the interbank market and will ease the pressure on central bank reserves,” said Vladislav Sochinsky, the treasurer at Citigroup Inc.’s Ukrainian unit.. “The fact that the regulator will have the freedom to decide the amount of sale and tenor is positive and clearly increases the flexibility in the decision- making process.” Ukraine’s central bank regulates the exchange rate of the hryvnia by buying and selling dollars.

Source: Bloomberg