OREANDA-NEWS. The growing risks and uncertainty in global financial markets generated by the eurozone's debt problems and a U.S. failure to tackle the budget deficit have prompted the National Bank of Ukraine to take preventive measures aimed at strengthening the resilience of the Ukrainian money market.

In this respect, the requirement for mandatory sale of a portion of foreign exchange earnings is an effective measure to stabilize the foreign exchange market, improve market expectations and boost confidence in the monetary unit of Ukraine. On the one hand, this measure ensures smooth inflows of foreign exchange into the market. On the other hand, it leaves the market forces of demand and supply free to determine the behavior of hryvnia's exchange rate.

The maintenance of equilibrium in the foreign exchange market is crucial for ensuring price stability, which is the top priority of the National Bank of Ukraine in accordance with the applicable law.

In view of the above, the National Bank of Ukraine Board has approved Resolution No. 381 of 25 September 2013 On Amendments to NBU Board Resolution No. 163 of 14 May 2013.[1] Under this Resolution, the requirement for mandatory sale of foreign exchange applies not only to the proceeds from export but also to all the overseas foreign exchange earnings of legal entities (that are not authorized banks) and sole proprietors. In addition, this requirement applies to the authorized banks' own transactions under foreign economic contracts.

The implementation of the above-mentioned measures will help:

nail down the positive trends seen in the development of the money market (including the foreign exchange market), such as retention of price stability and preservation of predictable dynamics of hryvnia's exchange rate, expansion of banks' resource base and lower levels of dollarization, etc;

withstand potential risks associated with the instability of global financial and commodity markets;

make timely payments in the foreign exchange under foreign economic contracts;

improve the dynamics of the balance of payments and its components.