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determined by operations on the interbank foreign exchange market with the NBU's active participation. At the same time, the rate on the cash market and the card rates of banks will be subject to the same rules as in the last year and a half. The NBU believes that the new exchange rate regime will strengthen the stability of the Ukrainian economy and the foreign exchange market and reduce the risks of accumulating currency imbalances.
The NBU has eased currency restrictions to improve the FX market's operation. As National Bank reported, starting from 16 September 2023, when calculating the amount of cash foreign currency that can be sold in the FX market, a bank or a nonbank financial institution will consider cash foreign currency balances accounted for in their cash desks as of 13 April 2022. Thus, the National Bank has enabled state-owned enterprises to transfer funds abroad to fulfill credit or loan obligations to non-residents restructured on terms the government agreed upon. In addition, institutions are allowed to make other payments related to servicing such restructured obligations. These changes will contribute to the resolution of restructured external debt by state institutions, the NBU added. It is noted that institutions will sell foreign currency to customers in cash within the amount determined by the updated criteria. The NBU also expanded the medical services for which individuals can transfer funds abroad.
The flow of private funds to Ukraine is decreasing. The volume of private remittances decreased by 5.8% in July and amounted to $939M, National Bank data shows. In particular, wages from Ukrainians abroad increased by 2.9%, while other private transfers received through official channels decreased by 22%. In total, 11.2% fewer remittances were sent through official channels than in July last year, while the flow through informal channels was at the same level as last year (increased by 0.9%). In just seven months of the year, the volume of remittances decreased by 10.2%, including net wages by 9% and private transfers by 12.9%. Note that in the pre-war year 2021, the volume of remittances to Ukraine increased by 25.4% to $15.026B compared to 2020.
58 UKRAINE Country Report October 2023 www.intellinews.com