Ukraine restricts trade in gold

Ukraine's central bank has new capital controls Operated to cushion the decline in the value of the currency. A new resolution signed on March 3 stipulates that banks may not buy more than $10,000 in foreign currency for customers. For currencies other than dollars, this limit also applies, but converted to the current exchange rate of that currency with the US dollar. It is also no longer possible to transfer foreign currency in Ukrainian bank accounts abroad, provided that the person in question has paid all bills, debts and taxes.

Buying gold is limited

Capital controls are not limited to foreign currencies alone. The trade in precious metals is also subject to increased surveillance. For example, from now on, banks in Ukraine will not be allowed to do more than 3,216 troy ounces Selling gold (or a similar value in other precious metals) per week per bank to a customer. This restriction does not apply to gold transactions between banks and to customers who have previously lent their gold to the bank and want to collect it.

Skyrocketing inflation

These new measures by the central bank are intended to prevent foreign currency from flowing out of Ukraine and therefore putting further pressure on the value of its own currency. The new capital restrictions will remain in place for three months, from 4 March to 3 June 2015. Importers of the most essential goods, such as fuel, food and medicine, can rely on a special foreign exchange window. In this way, the supply of the most necessary goods is theoretically assured. Remarkably, the supply of weapons has also been secured in this way.

Ukraine has been plagued by an economic crisis and very high inflation since last year's revolution. Earlier this week, the central bank raised interest rates to thirty percent. But whether savers will still be tempted by this remains to be seen. See also the following chart of the gold price in the Ukrainian currency.

Gold price in Ukrainian currency