The National Bank of Ukraine is planning to sign an agreement on currency swap with Russia that would allow bilateral trade without involving third countries' currencies.

This was stated by National Bank Chairman Serhiy Arbuzov in an interview following his visit to China, which is available on the NBU website.

"We are planning to sign a swap with Russia. We have a huge turnover with this partner. If we convert all the settlements, and trade volume with Russia is about $50 billion, it will be a huge swap between our banks," Arbuzov said.

The head of the National Bank also added that such talks must be resumed with Belarus. "Once we held the negotiations, then stopped, and now we are planning to resume them. This is very convenient to this country, so we will continue to sign swaps with our partners. Some customers may not transfer to these currencies and remain working in familiar conditions. This is their right to choose," he said.

Commenting on the signing in Beijing June 26 of a three-year agreement on currency swaps of $2.36 billion with the People's Bank of China, Arbuzov called the event historic to this country.

"We have signed for the first time a swap agreement with our partner, with which we have trade turnover - this is the exchange of currencies between the two countries to enable enterprises in both countries to conduct settlements between them in the local currencies, without using a third currency. Thus, companies can avoid third currency devaluation risks," he said.

Meanwhile, the central bank governor said, the agreement applies only to the amount of UAH 20 billion, but it may be increased: "We discussed this issue with our Chinese partners, and there is no problem. This can be done very easily in the framework of the agreement we have signed."

In addition, the NBU head announced that the agreement signed with China will improve the work of Ukrainian exporters.

"During a meeting between the heads of our states, the amount of $10 billion was agreed, to be reached in the trade turnover. If we find for our enterprises a more convenient mechanism of payments, we will reach this level. If we simplify the process of exchange, our exporters will work better, too, and the volumes will grow not only in imports but also in exports. In addition, we are creating the conditions for our exporters to avoid foreign exchange risks they faced before. Today the exchange rate situation is much easier to predict," he said.

At the same time, Arbuzov noted that this agreement also leaves a positive impact on the exchange rate of the hryvnia. "We will be able not to use our reserve currencies and make payments between the countries in the national currencies. Therefore, we can create even greater stability for our currency and optimize the demand for reserve currencies," the NBU head said.

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