Technical Assistance Reports

Ukraine: Technical Assistance Report-Foreign Exchange Derivatives Market Development

June 13, 2025

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Format: Chicago

International Monetary Fund. Monetary and Capital Markets Department "Ukraine: Technical Assistance Report-Foreign Exchange Derivatives Market Development", Technical Assistance Reports 2025, 064 (2025), accessed July 19, 2025, https://doi.org/10.5089/9798229014243.019

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Summary

This report overviews the IMF technical assistance mission to enhance Ukraine’s FX derivatives market amidst ongoing economic challenges. In navigating the complex environment, the National Bank of Ukraine (NBU) imposed FX restrictions to manage flows, complicating normalization of financial markets. The mission examined the key enabling conditions for FX derivatives markets – a robust regulatory framework, a range of instruments across maturities, well-organized infrastructure, and heterogeneity in the user base with different risk profiles – all supported by effective money and FX operational framework. The assessment found that key enabling conditions for FX derivative markets exist, although the business needs for FX derivatives is weak, and intermediaries remain cautious about FX exposures. Some steps have been taken to ease FX restrictions, yet additional steps need to be anchored on strong and consistent supporting policies, including improving the effectiveness of monetary operations and streamlining FX operations. The recommendations emphasized that the NBU’s commitment to return to an inflation-targeting framework supported by exchange rate flexibility augurs well for supporting market-based incentives for FX derivative trading.

Keywords: Financial market development, Foreign exchange derivate market, Ukraine.

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