TITLE: Ukraine's National Bank Unifies Reserve Requirements for Interbank Repo Transactions
BODY:
On June 12, 2026, the National Bank of Ukraine (NBU) announced amendments to unify how banks calculate reserve requirements for interbank repo transactions. Effective August 10, 2026, funds raised by banks from resident banks through repo transactions will no longer be subject to reserve requirements, regardless of whether transactions are concluded directly between banks or through a central counterparty.
The NBU will exclude from the reserve base funds raised through repo transactions concluded with a central counterparty on organized capital markets, provided those funds were raised by the central counterparty from another resident bank. However, funds raised through repo transactions with a central counterparty from non-resident entities will continue to be subject to reserve requirements. Reserve requirements represent funds that banks must set aside in correspondent accounts with the central bank, calculated as a percentage of the bank's liabilities and averaged over the reserve period. This mechanism allows banks to manage liquidity fluctuations while enabling the NBU to absorb excess liquidity from the banking system.
The NBU anticipates these changes will increase banks' participation in repo transactions through central counterparties, thereby strengthening the interbank money market and enhancing monetary transmission. The amendments also align Ukrainian regulations more closely with European Union standards. The changes were introduced through NBU Board Resolution No. 62 on Amendments to the Regulation on the Procedure for Creating and Maintaining Required Reserves by Ukrainian Banks and Branches of Foreign Banks in Ukraine, and NBU Board Decision No. 183 on Amendments to NBU Board Decision No. 752. Both instruments were adopted on June 12, 2026, and take effect on August 10, 2026. The proposals were developed following consultation with the Money Market and Forex Contact Group, the National Association of the Banks of Ukraine, the Settlement Center, and Ukrainian banks.