From 15 November 2009, the interest rate charged by foreign lenders on foreign currency loans to Ukrainian residents will be limited.
The National Bank of Ukraine (NBU) has recently reintroduced caps on the interest rate foreign lenders can charge on loans in major currencies such as euros, US dollars and sterling, as follows:
- 9.8% p.a., for fixed-rate loans with a maturity up to 1 year;
- 10% p.a., for fixed-rate loans a maturity from 1 to 3 years;
- 11% p.a., for fixed-rate loans with a maturity in excess of 3 years; and
- 3-month USD LIBOR plus 750 basis points for all floating rate loans.
The NBU believes this measure will strengthen currency regulation in Ukraine and will enable Ukrainian borrowers to access credit on more favourable terms. Bankers and the business community are, however, sceptical about the new measure.
Law: NBU Resolution No. 614 dated 15 October 2009 "On Certain Issues of the Registration of the Foreign Currency Loan Agreements (Credit Agreements), Entered between Resident Borrowers and Non-Residents".
This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq
Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.
The original publication date for this article was 28/10/2009.
