Ukraine prohibits loans in foreign currency

National Bank of Ukraine has decided to ban credit in foreign currency from commercial banks in the country as citizens' and companies writes the Ukrainian edition of Kommersant on information from bankers. The decision has not yet been officially announced, nor specify the date from which will come into force. According to preliminary information, this will happen "soon", probably as a "transition period" during which will be possible for some forms of lending in foreign currency. The ban on foreign currency lending in the National Bank of Ukraine aims to stop the devaluation of national currency bracelet, which from the beginning of the crisis has devalued by about 60%. Since late last year the National Bank seeks to make unprofitable loans in foreign currency for the citizens, take measures for their overvaluation. Since June the companies can receive credits in foreign currency only if they have income in foreign currency. Overall, banks are not against the ban on lending in foreign currency, but predict that they will become unprofitable deposits in foreign currency, which at present they are actively attracted. In August, there is even a slight decline in deposits in the bracelets from the previous month, while growth is recorded by a few percent of deposits in foreign currency as citizens and companies that have reached a total of 13.32 billion dollars. To stop the inflow of foreign currency deposits, banks will be forced to significantly reduce the interest thereon. According to bankers the new rules will result in moving the accounts in other countries like Switzerland or the Republic.