The National Bank of Ukraine (NBU) has revised some rules for the currency market, permitting foreign debt to be used as capital for Ukrainian companies and relaxing the purchase of foreign currency to pay for medical treatment of individuals abroad.

According to a Thursday posting on the NBU's website, the amendments are made to resolution No. 342 dated June 7, 2016.

"The NBU Board has decided to expand the list of exceptions. The board permitted reducing terms for returning a loan or a credit in foreign currency by resident clients who are not banks to nonresidents when the debt is being rescheduled and claims on the principal of the loan or the credit are accrued as an extra contribution of nonresident in the charter capital of resident," the NBU said.

The central bank believes that the decision will help cut Ukraine's foreign private debt without outflow of foreign currency outside Ukraine and without creating an additional pressure on the currency market.

"Ukrainian business would be able to increase capital thanks to early repaid currency liabilities to nonresidents," the NBU said.

The NBU recalled that today residents can pay credits and loan in foreign currency under the agreements with nonresidents no early than the term outlined in the agreements. The exceptions for this requirement are cases when early repaid funds are sent to additionally capitalize the borrower bank or the liabilities are rescheduled thanks to new loans and when the creditor is an international financial institution or a foreign export-credit agency.

According to the amendments, information about transactions on the purchase of foreign currency to pay for treatment of individuals abroad will be included in the register without providing relevant documents to the NBU.

The bank will be able to buy foreign currency for its clients for these purposes next day after the day when hryvnias were sent to the account to buy foreign currency and, if the bank has own free foreign currency, on the day when clients submit a transfer order to the bank.

Supervision over ending stocks on accounts of resident clients (apart from individuals) during purchase of foreign currency has been improved.

"Until now the NBU checked this information on the date of receiving information about this transaction in the relevant register. The banks will now check this information on the date of purchase of foreign currency," the central bank said.

The regulator also amended a procedure for receiving credits and loans in foreign currency by residents from nonresidents and providing loans in foreign currency by residents to nonresidents (resolution No. 270 dated June 17, 2004).

"The Board toughened responsibility of banks for checking and analyzing documents (information) during the registration and servicing of credit and loan agreements that imply the execution of liabilities in foreign currency to nonresidents, including the revealing of signs of risky financial transactions," the NBU said.

The list of grounds for refusal to register and annul the registration of credit and loan agreements by the NBU was also expanded.

The amendments are outlined in NBU resolution No. 275 dated August 23, 2016. They will take effect on September 1, 2016. The amendments to resolution No. 342 will be in effect until the document expires – until September 14, 2016 inclusively.