National Bank of Ukraine : Expanded the Criteria for Selecting Banks to Participate in the NBU’s FX Intervention Conducted in the Form of a Request for Best Quotation

5 January 2017

Press Release

The National Bank of Ukraine has sharpened the criteria for selecting banks to participate in the FX intervention conducted in the form of a request for best quotation envisaged by the NBU Foreign Exchange Market Intervention Strategy for 2016-2020. Up until now, the NBU has selectedbanks eligible to participate in these currency interventions based on the single criterion,regarding volumes of FX purchase and sale transactions with other interbank market participants andthe NBU, which was published in early November 2016. Each quarter the NBU selected 20 banks that have performed the largest volumes of FX purchase and sale transactions in the previous quarter. The first list of banks eligible to participate in the FX intervention in Q4 2016, which were selectedbased on the transparent criterion, was published in early November 2016.

However, the NBU deems it necessary to expand the criteria to adopt a more impartialapproach to the selection of banks eligible to participate in currency interventions conducted in the form of a request for best quotation.

From now on, 20 top-ranked banks based on the previous quarter results in terms of the volume of interbank market transactions. An overall rating is calculatedbased on the rating in each of the three composite rankings assigned to the bank based on three criteria:

· thevolumes of transactions performed by the bank involving the purchase/sale of foreign currency with other market participants and the NBU (the weight of position in the ranking included in the calculation of the overall rating stands at 50%);

· the volume of transactions performed involving the purchase/sale of cashless foreign currency with bank's customers (the weight of position in this ranking - 30%); and

· thesize of the bank's assets (the weight of position in this ranking - 20%).

The amendments to this effect havebeen approved byNBU Board Resolution No. 1 of 5 January 2017 On Amendments to the Regulation On Procedure and Conditions of Foreign Exchange Trading. The amendments will come into effect from 6 January 2017.