KIEV, March 31 Ukraine's central bank, expecting
the first tranche of an international loan in April, has
softened regulation of its foreign currency market imposed last
month to inhibit currency devaluation and capital outflow.
"Today the National Bank has optimised the measures in order
to ensure balance on the market," the central bank said in a
statement on Monday.
Ukrainian banks will be allowed to resume forward and swap
FX deals. From April 1, they will also be allowed to buy foreign
currencies for a client two days after the client deposits
hryvnias in separate accounts, instead of three days.
In early February, the central bank banned banks from buying
foreign currency before the sixth day after hryvnias were
deposited. The aim was to protect the currency during the months
of anti-government protests, which caused the hryvnia to plummet
to record lows against the dollar.
Since mid-March, the central bank has been gradually
reducing this period. Now it says banks will no longer need to
flag clients' applications with the central bank.
The central bank also cancelled a ban on purchasing foreign
currency for insurance-company reserves and for investment
Last week, a delegation from the International Monetary Fund
and Ukraine announced a $14-18 billion bailout package. That
needs to be approved by the IMF executive board in April.
Ukraine's finance minister, Oleksander Shlapak, said Kiev
expected a disbursement of $3 billion in the first tranche of
the loan. The deal will also unlock further credits, for a total
of $27 billion, intended to help the heavily indebted ex-Soviet
republic stabilise its economy after years of mismanagement.
Conditions sought by the IMF include allowing the hryvnia to
float more freely against the dollar. The currency has lost
about 25 percent of its value against the dollar since the start
of the year.
"As dollar supply is quite weak, the hryvnia will continue
falling until the first IMF tranche is seen on the market", a
bank dealer said.
(Reporting by Natalia Zinets; Editing by Larry King)