Ukraine is introducing a new mechanism for creating reserves for foreign exchange forward and futures transactions, which can be used if necessary, to ensure financial stability. This tool prevents the system risks associated with entering into contracts, the variable of which is the exchange rate or the price of the security metal to the exchange rate.
Relevant resolutions of the National Bank of Ukraine on October 16, 2018 No. 107 “On approval of the Regulation on the formation and storage by banks of Ukraine and branches of foreign banks in Ukraine of reserves for forward and futures contracts with or without delivery of the underlying asset, the variable of which is the exchange rate or price of the banking metal “And No. 108” On Approval of Amendments to the Regulations on the Procedure for the Formation and Storage of Required Reserves by Ukrainian Banks and Branches of Foreign Banks in Ukraine “entered into force on October 19, 2018 .
The decision on the use of this mechanism will be taken by the NBU Board. Until a corresponding separate decision of the Board appears, the specified reservation requirements for forward and futures contracts will not apply.
When using the mechanism, the reserves will be formed in national currency, and obligations to form them will arise from the day following the date of the agreement and will be valid until the day of final settlement of the transaction or its termination inclusive. In this case, the reservation rate will be unchanged for the entire period of the contract.
Only contracts that were entered after the formal introduction of the requirement by a separate decision of the Board are subject to reservation.
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