From 21 June 2023, the National Bank of Ukraine (NBU) allowed Ukrainian borrowers to make transfers abroad for servicing and repayment of new cross border loans if funds received from abroad were credited to borrowers’ accounts in Ukrainian banks after 20 June 2023.
Residents, as borrowers, will be capable of carrying out these transactions while adhering to the following conditions:
- Transfers of funds abroad for interest payments (including fees, charges, and other loan servicing payments) must not exceed a maximum interest rate of 12% per annum;
- Transfers of funds for loan repayments with a term of up to three years must be made by borrowers using solely their own foreign currency funds, rather than purchasing foreign currency on the interbank foreign exchange market with hryvnias;
- For loans with repayment terms exceeding three years, transfers of funds for loan repayments during the first three years must also be made by the borrower solely using their own foreign currency funds that cannot be acquired on the interbank foreign exchange market with hryvnias. However, borrowers will be allowed to purchase foreign currency with hryvnias for interest payments, fees, charges, and other payments specified in the loan agreement starting from the fourth year of servicing of the loan; and
- Any transfers of funds as prepayment of loans (as a result of acceleration or otherwise) are not permitted.
Possibility to attract and service new loans on terms above was established by the recent NBU Resolution No. 77 dated 20 June 2023, “On Amendments to Resolution No. 18 of the Board of the National Bank of Ukraine dated 24 February 2022” which became effective on 21 June 2023.
The NBU believes that these conditions will help mitigate the risks of unproductive capital outflows. As a result, the impact on international reserves and the foreign exchange market will be limited, while businesses will have the opportunity to attract new moneys from external sources. In addition, this will contribute to expanding the possibilities for international partners to direct financing towards the recovery of the Ukrainian economy.