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

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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