Tighter deadline for repatriating agricultural FX revenue has yielded results - National Bank of Ukraine

MOSCOW. April 11 (Interfax) - The National Bank of Ukraine said tightening the deadline for repatriating foreign currency revenue from exports of certain agricultural products from 180 to 90 days had yielded results, however it is for the government to decide whether to grant a request by the agricultural sector to reinstate the 180 day period, Ukrainian media reported with reference to the regulator.

"Business proposals to relax the deadline for settlements (from 90 to 180 days) for exports of certain agro-industrial products will be submitted to the Cabinet of Ministers for consideration. It is the government that is empowered to decide the priorities, based on an analysis of the proposals of the relevant ministries [...]. At the same time, the NBU will be involved in this analysis, in particular, to provide its own calculations for a comprehensive assessment of the situation," the National Bank said in a letter.

According to an analysis by the relevant ministries, the production cycle and specifics of logistics for individual goods and sectors of the economy are taken into account.

"If the Cabinet of Ministers receives reasoned recommendations regarding the advisability of setting other deadlines for settlements (differing from the general ones) for exports of specific goods, the National Bank will address them in the legally prescribed manner," the regulator said.

The NBU's position on the importance of the timely repatriation of foreign currency revenue remains unchanged.

"This is necessary both to improve the country's balance of payments and currency market stability, and to bring forward the NBU's steps to ease foreign exchange restrictions for all enterprises. Taking this into account, the National Bank is systematically counteracting unproductive capital outflow, including by taking measures for the timely return of export revenue," its press service said.

According to the National Bank, receipt and sales of export revenue by exporters of agricultural products has increased markedly after the deadline for settlements for exports of certain items was reduced from 180 to 90 days in November last year.

"For example in February it exceeded the December indicators, and this is not due to seasonal factors alone. In previous years, February indicators were usually significantly lower than in December. Moreover, in February to early April, proceeds from contracts for which both the old settlement deadlines and new ones were in effect actually entered the market," the letter said.

Following a government request, the NBU on November 11, 2023 halved from 180 to 90 days the deadline for settlements for export transactions for 12 product groups from the so-called agricultural section 1-24 of the Ukrainian customs classification to counter illegal grain exports.

On April 5, following a request by agricultural associations and a meeting with the National Bank and economy and agriculture ministries, Daniil Getmantsev, the chairman of the Rada's Financial, Tax, and Customs Policy Committee, wrote to the Cabinet of Ministers asking it to consider restoring the 180-day period for the repatriation of foreign currency earnings for farmers that had previously been halved.