Poland offers Ukraine swap line as NBU suspends FX transactions

The National Bank of Ukraine suspended most foreign exchange transactions today (February 24) as Russian forces invaded the country.

Poland’s central bank today offered the NBU a 4 billion zloty (approximately $950 million) currency swap line. The National Bank of Poland said it would support its Ukrainian counterpart.

The Ukrainian hryvnia fell sharply against foreign currencies, reaching 29.78 against the dollar earlier today from around 27.30 at the beginning of the year.

The NBU said it had introduced a moratorium on all cross-border foreign currency payments, except where they were necessary to help with the war effort. NBU first deputy governor Kateryna Rozhkova posted on social media that Ukraine’s payments system was continuing to function well.

The NBU also asked citizens to use non-cash payments if at all possible, saying the electronic payments system was working well despite the fighting. It limited cash withdrawals from each individual bank accounts to 100,000 hryvnia ($3,357) per day.

The central bank said that domestic non-cash payments would be made without restrictions. It said it was carrying out liquidity support operations for Ukraine’s banks.

It is not clear whether electronic payments will be able to continue uninterrupted. Reports from Ukraine say that Russian forces have carried out heavy air and artillery bombardments, which could severely disrupt communications systems.

It is also unclear whether the Ukrainian authorities moved large volumes of cash to regional lenders before the Russian invasion. The government of president Volodymyr Zelensky only declared a state of emergency on February 23, escalating that to martial law today.

The NBU is based in the Ukrainian capital Kyiv, but may be forced to move some of its operations. Russia carried out airstrikes on Kyiv and its troops seized an airport near the capital. Some nations moved their embassies to the western Ukrainian city of Lviv shortly before the invasion began.