NBU lifting cap off cash forex rate for banks

As of May 21, the National Bank will lift restrictions on setting the exchange rate at which banks can sell cash foreign currency to clients.

This was reported by the press service of the National Bank with reference to the relevant resolution (No.102), Ukrinform reports.

"From May 21, 2022, the National Bank of Ukraine will lift restrictions on setting the exchange rate at which authorized institutions are allowed to sell cash foreign currency to clients. Previously, the relevant rate was not to deviate from the official one by more than 10%," said in a statement.

The resolution also removes similar restrictions on setting the exchange rate at which banks write off hryvnia funds from clients’ accounts when their hryvnia cards are used abroad.

According to the NBU, the decisions will improve operating conditions for legal market players, which will increase competition and the liquidity of the legal segment, while reducing the volume of illegal transactions.

All this will make the foreign exchange market more stable and help reduce the amplitude of exchange rate fluctuations in its cash segment, the regulator hopes.

As reported, until the end of the war, the official exchange rate shall remain fixed at UAH 29.25 per dollar.

It was also reported that the National Bank allowed banks to resume on April 14 the sale of cash foreign currency to the public.

Experts believe that dollar fluctuations in the cash market reflect the net demand and supply of cash currency.