Banks may get to sell foreign exchange earnings

Ministry of Economic Development and Trade of Ukraine proposes to introduce a requirement for mandatory sale of foreign exchange earnings. Relevant Draft Law of Ukraine "On temporary introduction of requirements for the mandatory sale of foreign exchange earnings, has been published on the site office. The purpose of the bill is to provide the National Bank of Ukraine the right to enter a period of 6 months the requirement of mandatory sale of foreign exchange earnings for the benefit of residents and nonresidents in the case of threats to the formation of deficits. As a consequence, the National Bank in case of tension and threat of an imbalance in the foreign exchange market will be able to provide a guaranteed sale of foreign currency, which will fully perform its basic function - to ensure the stability of the currency. As stated in a memorandum today Ukraine is a country with a small open economy, poor levels of investment attractiveness, high dollarization and a critical dependence on external economic conditions for raw materials. The introduction of requirements for the mandatory sale of foreign exchange earnings will contribute to solving one of the major challenges facing the Ukrainian economy, namely the increase reserves, which will allow reduction of dollarization will increase the manageability of the money market will be an important factor for financial stability and to increase lending. Consequently, the creation of this legislative rule will contribute to the replenishment of reserves of the National Bank, and keeping stability of the nominal exchange rate of hryvnia against the U.S. dollar.