The National Bank of Ukraine (NBU) has decided to cancel its resolution No. 109, permitting banks to gradually include reserves in foreign currency in their general open currency position, reads a posting on the NBU's Web site.
"The gradual inclusion of reserves formed for the compensation of possible losses under active bank transactions in foreign currency into the calculation of the general (long and short) open currency position of banks [is permitted]. Reserves will be included in the position in equal parts [growing by 5% every month] within 20 months," reads the report.
According to the NBU, the bringing of methods for calculating the open currency position into line with international standards is stipulated in NBU resolution No. 182 of March 31, which cancels NBU resolution No. 109 of February 28, 2009 and approves new methods to be used by banks.
Resolution No. 182 will take effect from May 1, 2014.
"The NBU is fulfilling the recommendations of the International Monetary Fund and World Bank presented in the context of reform of the financial sector," reads the report.
According to the NBU, reserves will be included in the calculations under a schedule approved by resolution No. 182.
Banks will be also able to include reserves in the amount exceeding the said percentage pointed in the schedule into the calculations of the open currency position, but no more than the amount of government domestic loan bonds with the indexed value banks have in their portfolio.
"Empowered banks can buy foreign currency or alternatively government domestic loan bonds with an indexed value to bring the size of the general short open currency position of banks into line with the limit set by the NBU," reads the report.
According to the report, banks are recommended to take measures to change the currency for fulfilling their liabilities on credits issued in foreign currency to the national currency to avoid currency risks.
As reported, today the reserves for credits in foreign currency are formed in the currency of the credit and under NBU resolution No. 109 they are not taken into account during the calculation of the limits of open currency positions. Banks many times called on the central bank to cancel resolution No. 109.
