Page 38 - bne IntelliNews Ukraine Country Report May 2017

Exchange rate 2008 2009 2010 2011 2012 2013 2014 2015 2016E
Official UAH/USD (eop) 7.7 7.99 7.96 7.99 7.99 7.99 15.77 24 26
Official UAH/USD (avg) 5.27 7.79 7.94 7.97 7.99 7.99 11.89 21.84 26
Source: SP Advisors
Money transfers from Russia to Ukraine via foreign payment systems have been banned by a law signed by Russia’s President Vladimir Putin, TASS reported on April 4, citing the official legal information portal of the Russian government. The decision last month of Russia’s largest state-owned bank Sberbank to accept documents of the separatist territories of East Ukraine has expanded the Russia-Ukraine rift further into the financial sphere .
The Council of the National Bank of Ukraine (NBU) introduced on April 13 allowed for the repatriation of dividends earned in 2016. Partial repatriation of dividends for 2014-2015 was permitted in June 2016. Now from April 14, an investor can withdraw USD 5 mln per month of dividends earned through 2014-2016. The NBU said it does not expect any negative impact from this step on stability of Ukrainian currency. In particular, the regulator mentioned that starting June 2016, investors withdrew as much as USD 1.0 bln, but the process was spread out and did not have a significant impact on the exchange rate. The enhanced possibility to withdraw 2016 dividends is another positive signal from the NBU confirming the regulator’s confidence in the hryvnia's prospects. Initially, the NBU envisaged multiple limitations for dividend withdrawal which was among the key concerns of foreign investors.
On top of dividends repatriation, the NBU allowed banks early debt repayments to non-residents with a credit rating above B3/B-. Also the regulator lifted up to a USD 5 mln (from USD 1 mln) prepayment limit on import contracts.
The National Bank of Ukraine (NBU) continues to gradually ease capital controls in the country, with the regulator now reducing the limit for compulsory sales of export proceeds to 50% (from 65%), it said in a statement on April 4. "This move primarily aims to promote export activities of Ukrainian enterprises that need to import components to produce their products that are subsequently exported," the statement reads. "This will make it possible to reduce FX risk exposure faced by these enterprises and enable them to speed up foreign trade operations." The regulator also increased the limit on daily foreign currency purchases for individuals to UAH150,000 (€5,250) from UAH12,000 (€400).
38 RUSSIA Country Report April 2017 www.intellinews.com