Ukraine’s central banking has said that cash withdrawals can only be made in local currency and foreign currencies are prohibited. The monetary authority says the measures aim to ensure the functioning of the nation’s financial system under the martial law introduced in response to Russia’s military offensive.
National Bank of Ukraine Restricts Hryvnia withdrawals and Fixes Exchange Rates
On Thursday, as people flocked to ATMs and banks offices in large numbers, the National Bank of Ukraine adopted a resolution that limited daily cash withdrawals of local currency up to 100,000 Hryvnia. Except for social payments and wages, $3,350 The regulator also prohibited cash from foreign currency accounts.
The decision came after in the early hours on Feb. 24, Russia launched a “special military operation” in Ukraine, as announced by President Putin. Many Ukrainians fled their major cities including Kyiv as a result of reports about Russian tanks crossing the border.
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The NBU demanded that banks continue operations despite the imposition of martial law by President Volodymyr Zelesky. This includes the restriction of the sale and purchase of foreign currency, as well as the suspension of foreign forex operations. The official exchange rates of the hryvnia have been fixed, the authority added, at 29.25 hryvnia per $1 and 33.17 per €1, respectively.
Central bank imposed a moratorium for cross-border foreign currencies payments. It also prohibited Ukrainian banks to process debit transactions on accounts belonging to Russian Federation residents. This ban includes electronic money distribution and deposit to e-wallets.
It does not mention other digital assets, such as cryptocurrency. Ukraine is working on regulation. The parliament of the East European nation, ranking among the region’s leaders in terms of crypto adoption, recently approved a law “On Virtual Assets” which lists the NBU as one of the main regulators of the market. But, it is still to come into effect.
The National Bank of Ukraine stated that these restrictions did not apply to transactions done by and for the Ukrainian government or enterprises. According to the NBU, all cashless payments will remain unaffected. All ATMs are allowed to withdraw cash with no restrictions. Banks shall also ensure that their branches continue to function, adding that cashless payments cannot be restricted.
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