Monday, September 22, 2014

Ukraine situation Updates ( September 22 - 23 , 2014 ) -- Ukraine Introduces Capital Controls .....News and views on the ongoing Ukraine conflict .

NBU Reduces Maximum Sale Of Foreign-Currency Cash To UAH 3,000 Per Person Per Day (17:27, Monday, September 22, 2014)

The National Bank of Ukraine has reduced the maximum amount of foreign-currency cash that can be sold to a single person per day to the equivalent of UAH 3,000.
The National Bank of Ukraine announced this in a statement on Facebook.
"Given the increased tension in the cash segment of the foreign-exchange market, the resolution provides for reduction of the maximum amount of foreign-currency cash that can be sold to a single person in a single operating (working) day to an amount not exceeding the equivalent of UAH 3,000," the statement said.
This restriction does not apply to purchases of foreign-currency cash by resident individuals for the purpose of fulfilling their foreign-currency obligations under loan agreements concluded with authorized banks.
This is confirmed by the National Bank of Ukraine resolution No. 591, which will come into force on September 23.
In addition, the resolution provides for introduction of additional anti-crisis measures in the area of performance of certain foreign-currency transactions (import of goods without their transportation onto the territory of Ukraine, transfer of foreign currency out of Ukraine by residents for the purpose of redeeming corporate rights from non-residents, performance of operations based on individual licenses issued by the National Bank of Ukraine etc.).
These measures are exclusively temporary, and they will be canceled immediately after minimization of the relevant negative factors on the foreign-exchange market.

As Ukrainian News earlier reported, the National Bank of Ukraine has decided to reduce the proportion of foreign-currency earnings that exporters are required to sell from 100% to 75%.

Ukraine Introduces Capital Controls

Tyler Durden's picture

few days ago we showed how when Obama said there would be"costs" for Moscow in the Ukraine-Russian conflict, he got the recipient country of said costs woefully wrong, as confirmed by the economic data released by Ukraine which showed its Industrial Production crater at a pace on par with the Lehman collapse, confirming the Ukraine economy was on the verge of a spectacular implosion just in time for the harsh, Gazprom-free winter to finish off what little economic activity is left.
The resulting selloff in the Hryvnia and Ukraine bonds, was therefore, hardly surprising.
Which probably means the news reported by Bloomberg moments ago, which cites Ukraine's Unian news service, that the Ukraine central bank just instituted restrictions on Hryvnia use, i.e., capital controls, should also not come as a surprise, yet for all those expecting Russia to crater first under the weight of western sanctions, to see said cratering take place in western-backed (and IMF guaranteed) Ukraine is probably just a little unpleasant.
The details:
Central Bank forbids companies completing FX payments on import contracts if they don’t actually bring goods into Ukraine, Unian reports, citing Central Bank decree that comes into effect tomorrow.
  • FX payments on imports also prohibited if customs registration of goods takes more than 180 days
  • Foreign investors forbidden to receive investment return from selling Ukraine securities beyond stock exchange, except govt bonds
  • Foreign investors forbidden to receive dividend return on Ukrainian shares not traded in stock exchanges
  • Central bank also forbids FX transactions using individual FX licenses, except placing money by cos. on accounts in foreign banks
In other words, the money concentration into a select few government-approved (and controlled) asset classes has begun. For those who are unsure what happens next, please google "Cyprus and March 2013."
Source: Unian

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