Send money to Ukraine

In September 2014, the central bank, National Bank of Ukraine (NBU), capped the amount of foreign currency that residents are permitted to purchase at UAH3,000 per day. According to NBU statements, the September 2014 foreign exchange auction would be necessary to ensure that banks had sufficient assets to support these purchases. Residents who need to repay obligations or loans denominated in foreign currency are not subject to the UAH3,000/day restriction, however. Export proceeds must be repatriated within 90 days and all foreign currency credits must be reported. Licences are required for resident companies or individuals to invest abroad.

Also in September 2014, the central bank repealed a measure introduced earlier that year that required foreign currency remittances coming into Ukraine to be converted to hryvnia; individuals are now permitted to receive and hold remittances in foreign currency, which should help to boost the banking system’s pool of foreign exchange. Additional restrictions apply to specific types of transactions, for example, import transactions where goods are not physically delivered to Ukraine. The central bank indicated that such measures are preventive and temporary.

The government is committed to attracting higher levels of foreign investment, and in most cases, foreign investors are given the same status and domestic investors. Foreign capital is capped in certain sectors including publishing and energy, generally at 30%. However, the repatriation and conversion of foreign exchange receipts related to trade and investment have been subject to periodic restrictions in early 2014. These measures were temporary and most had been repealed as of September 2014, but we recommend consulting current NBU regulations before undertaking investment projects or commercial transfers.

The National Bank of Ukraine determines monetary policy, monitors the stability of the financial system, oversees banks and other financial institutions, maintains the country’s foreign exchange reserves and works to preserve the value of the hryvnia. The NBU’s General Department of Banking Supervision supervises the banking sector.

Having been pegged to the US dollar (at different levels) since 2005, the hryvnia was moved February 2014 to a flexible exchange rate regime, in an effort to make the Ukrainian economy more competitive on international markets. Due to the ongoing political and security crisis, the hryvnia’s real effective exchange rate fell by 24% between December 2013 and September 2014. The NBU has intervened in the foreign exchange market in an effort to stem the outflow of overall bank deposits and foreign capital, but states that it had no target for the hryvnia’s value and that it would maintain the free float system at least through early 2015.

The NBU has scaled up its efforts to monitor and control suspicious transactions to prevent money laundering and terrorism financing in the context of its territorial struggle with Russia. NBU governors declared a domestic bank, Green Bank PJSC, insolvent in September 2014 in response to its risky foreign exchange transactions and non-compliance with anti-money laundering restrictions.

Exchange controls are administered by the NBU, authorised banks, financial institutions, the Ministry of Infrastructure, the Ministry of Revenue and Duties, the State Customs Service, the State Service for Special Communication and Information Protection, and the Ukrainian State Postal Enterprise (Ukrposhta).

The Ukrainian economy has been significantly impacted by the territorial dispute kicked off by Russia’s annexation of Crimea in March 2014 and the resulting domestic security crisis. Discussions between the Ukrainian and Russian governments had considerably improved by late September 2014, and Ukrainian officials indicated that they expect the weeks-long ceasefire to hold. The economy has suffered immensely from the conflict, with the country receiving u US$17bn support package from the IF in May, and a further US$4.6bn in October to help pay for its gas (imported from Russia).

Ukraine’s new government under President Poroshenko and Prime Minister Yatsenyuk have reiterated their desire to strengthen economic ties with Europe, which could pave the way for easier financial flows in the future.

Ukraine’s monetary unit, the hryvnia, was introduced in 1996 to stabilise the economy after a period of hyperinflation in the early 1990s. One hryvnia is equivalent to 100 cents, or kopiyok. The National Bank of Ukraine issues banknotes in values of 1, 2, 5, 10, 20, 50, 100, 200 and 500 hryvnias. Coins are issued in values of 1, 2, 5, 10, 25 and 50 kopiykas and one hryvnia.