National Bank reintroduces reserve requirements for short-term funds attracted by Ukrainian banks from abroad

The National Bank of Ukraine (the "NBU") reintroduced the requirement for Ukrainian banks to reserve 20 percent of all funds in foreign currency attracted by the banks from non-residents for a period of 183 days or less. The decision was approved by the NBU resolution no. 431 of 22 September 2010 and was announced in a letter sent by the NBU to the commercial banks on September 23.

This change means that from 1 October 2010 Ukrainian banks will be required to deposit 20 percent of all short-term foreign currency deposits and loans received from abroad with the central bank.

Banks with foreign capital, which often receive short-term funding from their parent groups, are likely to be particularly affected by the reintroduction of the reserve requirements and should consider attracting funds for a period exceeding 183 days.

For further information please contact

Armen Khachaturyan
Senior Partner
armen.khachaturyan@asterslaw.com