OREANDA-NEWS. On 10 February 2009 was announced, that NBU sent the letter #14-011 to the commercial banks, stating that the commercial banks, which significantly increase the foreign currency amount on their clients' accounts, will not be entitled to currency swaps with the NBU. At the same time, the NBU adopted the Resolution on the improvement of the condition of the commercial banks. The Resolution states that the commercial banks may sell foreign currency to their clients at a lower exchange rate in the case of the premature loan redemption. Additionally, the banks may prolong the maturity of the loans to their clients till 1 October 2011, without recognizing them as non-performing.

Millennium Capital sees that the NBU requirement on the swap operations to be rather unrealizable, since the commercial banks cannot affect the decision of their clients to sell foreign currency, especially in the conditions of high exchange rate volatility. In this situation the banks, suffering from hryvnia liquidity shortage, may stop selling foreign currency to their clients. On the one hand, it will reduce the growth of the foreign currency on their accounts, while, on the other hand, it will cut their demand on the interbank currency market. Still, the commercial banks cannot reduce the funds inflow on their clients’ accounts. Also Millennium Capital considers POSITIVE the news about the possibility of loan prolongation, since it may reduce the amount of the required reserves, formed by the banks in correspondence to the loan redemption terms.

Millennium Capital is an integrated financial services provider. Established in 2000 by a group of professionals with solid background in securities and corporate finance, Millennium Capital is now one of the major investment banking institutions.