Ukraine operates foreign exchange controls administered by the National Bank of Ukraine (NBU), the Ukrainian central bank.
Residents are free to hold foreign currencies in Ukraine without restriction. But companies – except where they receive payment from nonresidents – may acquire foreign currency only for specified purposes, e.g. for paying of foreign trade contracts.
Domestically foreign currency may only be acquired through Ukrainian banks.
Foreign currencies may not be used in domestic transactions except in specified limited circumstances.
The NBU classifies certain currencies (USD, euro, etc.) as convertible, which may be used for permitted purposes in Ukraine.
It is illegal for Ukrainian residents to hold foreign currency assets (including bank accounts and securities) abroad without an NBU license.
The Ukrainian currency, the Hryvnia (UAH), is the only legal tender in Ukraine. Use of foreign currencies in Ukraine without an NBU license is generally prohibited.
The UAH is internally convertible, meaning that residents may, subject to certain restrictions, buy foreign exchange in Ukraine from or through authorized banks. The UAH is not, however, convertible internationally, and so may not be used to pay contracts with nonresidents.
The UAH exchange rate is essentially pegged to the USD and is heavily managed by the NBU. For that reason the UAH is typically stable against the dollar, but is more volatile with respect to all other currencies.
The official UAH exchange rate is set by the NBU on the basis of daily trading on the Ukrainian interbank currency market. It broadly matches the market rate, and it is mandatory for use in all transactions.
Ukrainian law sets the following main restrictions regarding foreign currency transactions:
- Ukrainian exporters must repatriate their export proceeds within 180 days of export. Failure to comply results in severe penalties.
- From time to time (particularly in times of crisis) Ukraine may impose a mandatory sale of foreign exchange earned by exporter (normally up to 50% of export proceeds). No such requirement exists at this time.
- While inbound currency transfers are mostly unrestricted, outbound payments are subject to NBU licensing, except for a number of exempt transactions, such as import payments and foreign investment repatriations.
- Generally, foreign trade must be conducted in foreign currency; UAH may not be used in foreign trade without an NBU license.
- Foreign investment must be made in convertible foreign currency. Periodically rules are introduced that require or permit foreign currency to be converted into UAH before the investment is made.
- Service payments to nonresidents are subject to approval by a special governmental agency which ensures that the price paid is not excessive and are in line with world market prices.
- Residents are required to report their foreign currencies assets held abroad to the NBU on a periodic basis.
- Investments into foreign assets are subject to licensing by the NBU or, where the investment is in-kind, by the Ministry of Finance of Ukraine.
- Loans obtained by Ukrainian residents from nonresidents are subject to notification or registration with the NBU (depending on the loan term). The NBU further regulates the interest rate charged on such loans.
- Ukrainian banks act as agents of currency control for the Ukrainian government. They are required by law to enforce compliance of their clients’ foreign currency transactions with Ukrainian law.
Additionally, the usual customs restrictions apply on the ability of individuals to carry cash across the border. Permitted amounts are limited to an equivalent of euro 10,000 per person (out of which up to euro 3,000 needs no declaration); any greater amounts can only be moved by bank transfer or a similar method.