Lawyer: Prohibition of business to convert foreign currency loans into hryvnia harms economic activity in Ukraine
Kyiv • UNN
Lawyer Nazariy Adamchuk believes that the ban on converting foreign currency loans into hryvnia has a negative impact on economic activity. Experts suggest easing the ban by allowing individual decisions.
The National Bank of Ukraine's ban on the conversion of foreign currency loans into hryvnia for business has a negative impact on economic activity, as it cannot be circumvented, even if the bank and the client have managed to reach an agreement. This opinion was expressed in an exclusive commentary to UNN by Nazariy Adamchuk, attorney at law, partner at Alekseev, Boyarchukov and Partners.
A resolution of the Board of the National Bank of Ukraine introduced a mandatory ban on restructuring of foreign currency loans (even if the bank agrees to such restructuring). This mandatory prohibition cannot be circumvented even if both parties to the loan agreement agree to it. This restriction of the NBU has a negative impact on economic activity, but it cannot be circumvented, so the only thing left to do is to wait for the NBU to lift the ban
According to him, this resolution was adopted at the beginning of the full-scale invasion, and therefore it was prepared “virtually on the knee.” Of course, the resolution has been amended since then, but it has not been allowed to convert business loans into the national currency.
As experts say in their comments to UNN , the resolution banning the conversion of foreign currency loans into hryvnia for business does not have to be canceled, but should be eased. In particular, the bank and the client should be allowed to resolve this issue on an individual basis.
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Since the beginning of the full-scale invasion, Ukrainian business has demonstrated resilience and readiness to quickly adjust to current challenges.
In the case of the ban on converting foreign currency loans into hryvnia, Ukrainian businesses often take unpopular steps to stay afloat and avoid losing everything.
One of the Ukrainian businesses that has a foreign currency loan that dates back to 2006 is the owners of the Gulliver shopping center in Kyiv. By the way, at the time of the loan, the company that received the loan had other owners. The crises of 2008 and 2014 dealt an irreparable blow to businesses that were lent in foreign currency. This led to the fact that the current owners of Gulliver were forced to restructure their debt in 2020. However, it was not possible to convert the loan into hryvnia.
