Ukraine Imposes Capital Controls, Limits Foreign Currency Withdrawals

Tyler Durden's picture


Yesterday we reported that as part of the Ukrainian central bank's plan to bailout the nation's largely insolvent private banks, it would provide any needed funding but only "if they will remain under open control of the National Bank of Ukraine." And since the new CB head Stepan Kubiv's allegiance to Europe were already well-known, this was merely a quick and efficient way of providing Europe with all the banking details including asset holdings of the local population. Today, the annexation of the country's banking system by a "benevolent" Europe is complete.

Itar-Tass reports that Ukraine's national bank has imposed temporary limits to withdraw money from foreign currency deposits to sums equivalent to no more than 15,000 hryvnias (about $1,500) a day, National Bank Chief Stepan Kubiv told a press conference. Or, as the citizens of Cyprus call it - capital controls.

Why is Ukraine doing this? Because when your currency is crashing at a record pace to unseen lows, what is the best way to limit FX transactions? Simple - just minimize the amount of foreign currency that can be in circulation.

Which is also why the the central bank's capital controls do not touch local currency: there is more than enough of that in circulation since after all Ukraine has its own currency and can print it in infinite amounts: "For hryvnia deposits you may take as much as a million or two. Banks have liquidity," Kubiv said.

Then there was the token propaganda:

The chief banker also noted that the situation on Ukraine’s currency market was under control. "The exchange rate may move in one direction and the opposite. There are just emotions and misinformation on the financial market," he noted.


He assured the national bank would toughly stop violators of the currency law. For example, inspectors were sent to eight banks that had engaged in speculation, he said.

To summarize: first banks abdicate their control to a pro-European central bank, and now the citizens face their first (of many) capital controls which incidentally will simply aggravate the fund outflow situation even more, leading to an even faster drop in foreign reserves.

Finally comes the inflation. Wait until the people start rioting - think Egypt - when the economy collapses and a loaf of bread costs its wheelbarrow equight equivalent in Hryvnias. Just how fast will the countercoup in Ukraine take place then? Recall, in Egypt it was just over a year and a half...

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Fri, 02/28/2014 - 13:13 | 4489674 Hippocratic Oaf
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Ukraine have bitcoin?

Theft is theft either way.

Fri, 02/28/2014 - 13:14 | 4489679 PR Guy
PR Guy's picture

I'd be having kittens too if I had the US Navy Seals on my border!! ;-)


Fri, 02/28/2014 - 13:15 | 4489687 PR Guy
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At least they got democracy now :-)


Fri, 02/28/2014 - 13:17 | 4489692 fonestar
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Ukranians learning the hard way what happens when you reject Satoshi Nakamoto from their lives.

Fri, 02/28/2014 - 13:19 | 4489708 john39
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welcome to europe serfs.

Fri, 02/28/2014 - 13:29 | 4489767 StacksOnStacks
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Fri, 02/28/2014 - 13:42 | 4489838 fonestar
fonestar's picture


Fri, 02/28/2014 - 14:13 | 4489978 LMAOLORI
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I'll rush right out on your advice and let some thieves screw me over too ROFLMAO


Mt. Gox bitcoin customers could be out of luck, experts warn


Mt. Gox Bitcoin Exchange Down Amid $365 Million Theft Claim

Fri, 02/28/2014 - 14:47 | 4490101 fonestar
fonestar's picture

Only buy from trusted sellers like fonestar.  Look him up on today!  100% positive feedback!

We pride ourselves on our repudiation at fonestar!

Fri, 02/28/2014 - 14:51 | 4490202 SWRichmond
SWRichmond's picture

Economic hitman playbook.  Crash the currency.  Now foreign "capital" (bankers) can buy up assets at pennies on the dollar.

Fri, 02/28/2014 - 14:57 | 4490230 Boris Alatovkrap
Boris Alatovkrap's picture

Great, just great @#$%! Last time Boris is sell copper in Kiev!

Fri, 02/28/2014 - 14:58 | 4490238 Boris Alatovkrap
Boris Alatovkrap's picture

Boris is apologies... is mean "Great, just @#$% great!"

Sat, 03/01/2014 - 10:40 | 4493135 jerry_theking_lawler
jerry_theking_lawler's picture

Understandable considering the situation. Where exactly are you from again?

Fri, 02/28/2014 - 22:22 | 4492411 jez
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"We pride ourselves on our repudiation at fonestar!"




I'm sure you do.


repudiate; verb

1. to reject the authority or validity of; refuse to accept or ratify: 2. to refuse to acknowledge or pay (a debt) 3. to cast off or disown (a son, lover, etc)   [C16: from Latin repudi?re  to put away, from repudium  a separation, divorce, from re-  + pud?re  to be ashamed]


Fri, 02/28/2014 - 13:45 | 4489847 StacksOnStacks
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To any of you alt coiners out there:

Fri, 02/28/2014 - 13:48 | 4489860 fonestar
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Mmmm!  fonestar loves the gravy train!

Fri, 02/28/2014 - 13:49 | 4489866 StacksOnStacks
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I'm more of a Gravy Boat fan.

Fri, 02/28/2014 - 15:02 | 4490255 Boris Alatovkrap
Boris Alatovkrap's picture

"Gravy Train"...? You are refer to constant trip to toilet boil for expulsion of bowel liquidity? Is something like "Quantitative Ease"?

Fri, 02/28/2014 - 16:34 | 4490747 TPTB_r_TBTF
Fri, 02/28/2014 - 13:32 | 4489779 Thought Processor
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I think this one's gonna get messy.


Probably sooner rather than later.

Fri, 02/28/2014 - 14:50 | 4490120 bigkahuna
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You may be right - but it will have nothing to do with Russia or The Ukraine if it does. The US is strategically fine militarily with Russia owning the Crimea region. For all intents and purposes, they have owned it militarily if not de facto throughout modern history.


Right now, the world economy is in a shit storm. That means everyone - Europe, Russia, China, and the US and Your Country too.


All these leaders need an excuse to not be impaled by their citizens. War is the excuse - it is now and it always has been. ALWAYS.


If there is a real war over there, it will because the sociopaths that we all call leaders have decided to send your sons, your fathers, your brothers into fucking chaos. There are no good guys in this - only bad guys sending "sheep" to the slaughter (where they slaughter each other) - simply for a distraction to save their own behinds.

It is just this simple people (all people everywhere) - wake up or you, your brother, your dad, your son - is going to be sent to slaughter each other. 


WAKE UP PEOPLE!!!!!!!!!!!!!!!!!!!!!!!!!   WAKE UP NOW!!!!!!!!!!!!!!!!!!!

Fri, 02/28/2014 - 13:32 | 4489781 Levadiakos
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I hereby declare these games...OPEN!!!.................................Oh! Wait!

Fri, 02/28/2014 - 13:34 | 4489796 DblAjent
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Ukraine Imposes Capital Controls

Ukraine? Or Russia?

Fri, 02/28/2014 - 14:03 | 4489937 Buckaroo Banzai
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Fri, 02/28/2014 - 14:15 | 4489986 Urban Redneck
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"What difference does it make now?"

The Russian banks have 28B liability exposure, which Putin has already said may be backstopped by Russia

over 40% of domestic bank assets were international, and they're just getting around to capital controls now-- long gone

NPL estimates were up to 40% before TSHTF

Any sizeable business/industry in Ukraine (which are concentrated in the East) that still had deposits in local banks would have relocated those over the last week(s).

Ukraine has a fractional reserve banking system.

Do the math...

The little guy is FUCKED (as usual), they can print their own currency, but no one wants it - so the foreign purchasing power is gone.

Sat, 03/01/2014 - 00:04 | 4492583 Wahooo
Wahooo's picture

I don't think Mr. Kubiv is long for this world.

Fri, 02/28/2014 - 17:53 | 4491268 Silveramada
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really? shit-oshi sagamoto is the cause of the war in Crimea? you must be a geo-political neuro-scientist...

Fri, 02/28/2014 - 13:18 | 4489700 Colonel Klink
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I'm sure they're going to free the fuck out of them!

Fri, 02/28/2014 - 15:27 | 4489936 LMAOLORI
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Central Banker Democracy lol brought to them in large part by the U.S.


Ukrainian Neo-Nazis Declare that Power Comes Out of the Barrels of their Guns


The New Great Game: Why Ukraine Matters to So Many Other Nations



The Institute of International Finance, which represents big banks, estimates that with no change in policy Ukraine would need $30 billion in foreign assistance this year alone. The IIF predicts that the International Monetary Fund will insist as a condition for aid that Ukraine cut natural gas subsidies to consumers and industry, and allow its currency, the hryvnia, to fall further, shrinking the trade deficit. 



Fri, 02/28/2014 - 13:13 | 4489678 Silver_K-9
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Got Phyzz!?



Fri, 02/28/2014 - 13:17 | 4489689 fonestar
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Ukranians getting Zhou Tonged!

Fri, 02/28/2014 - 13:35 | 4489794 AG BCN
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The video was a bit shit, but carry on with the whole Bitcoin and third person thing, I will give it to you that it is amusing if nothing else. 

p.s. just for the record, my money will be going nowhere near Bitcoin. 

Fri, 02/28/2014 - 13:40 | 4489825 fonestar
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Oh your "money" will be going near Bitcoin, around Bitcoin and into Bitcoin.  When 10% of people accept Bitcoin it will snowball from there and you will accept Bitcoin in the same braindead manner you did "dollars".  Monkey see, monkey do.

Fri, 02/28/2014 - 13:53 | 4489888 AG BCN
AG BCN's picture

When 10% of people accept Bitcoin? 

Accept Dollars?

I am currently looking over the Mediterranian with a stash of Gold and Silver. 

Seriously son, come back in a few years and maybe we can talk then. 

Fri, 02/28/2014 - 16:33 | 4490743 Bytor325
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10% of the idiot generation snowboard, i still ski

Fri, 02/28/2014 - 18:12 | 4491417 fonestar
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fonestar brought a crazy carpet.  Then all of the kids held him down and gave his face snow washes.

Fri, 02/28/2014 - 13:44 | 4489845 freedogger
freedogger's picture

Sort of like saying in 1990 my computer will go nowhere near the internet.

Fri, 02/28/2014 - 13:58 | 4489909 fonestar
fonestar's picture

fonestar still remembers those dolts.  "Who would want a computer in their house?  Do you want a nuclear missile too?"  Reminds fonestar of the dolts on this blog.

Fri, 02/28/2014 - 14:02 | 4489928 AG BCN
AG BCN's picture

fonestar seems to be flustered. 

Fri, 02/28/2014 - 16:25 | 4490692 TPTB_r_TBTF
TPTB_r_TBTF's picture

i get a bit flustered too when the price of my holdings drops all month.

Sat, 03/01/2014 - 08:33 | 4492968 FinalEvent
FinalEvent's picture

And ofcourse that applies to everything except gold.

Fri, 02/28/2014 - 13:58 | 4489910 AG BCN
AG BCN's picture

Sort of like saying this time it will be different. Gold sunshine. You stick with the digits. 

Fri, 02/28/2014 - 14:00 | 4489921 fonestar
fonestar's picture

Well you're going to have to raise digits if you want to explore for gold.

Fri, 02/28/2014 - 14:07 | 4489949 AG BCN
AG BCN's picture

I mean seriously? I'm going to have to raise digits? Some paper may be involved for a very limited period of time until it turns into metal, but nothing more than that. I have no intention of ''exploring' for gold. 

Fri, 02/28/2014 - 13:14 | 4489680 TheFourthStooge-ing
TheFourthStooge-ing's picture

Welcome to the open control of the National Bank of Ukraine!

Sorry, no Spiderman beach towels.

Now get out of here and enjoy your new "freedom".

Fri, 02/28/2014 - 13:23 | 4489693 Element
Element's picture

I got zee debt!  Yaaaay!!

They seem to be attracted by the reckless immorality, corruption and denial.


The West is the BEST!

Fri, 02/28/2014 - 13:17 | 4489699 Skateboarder
Skateboarder's picture

$1500 is not insignificant money, at least to the non-management class.

Fri, 02/28/2014 - 13:34 | 4489790 Levadiakos
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I wipe my ass with it

Fri, 02/28/2014 - 13:57 | 4489902 Pool Shark
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Maybe, but how long before it becomes $1,000, then $500, then $100, then: "Oh, sorry comrade, your account has been 'appropriated' by the "Glorious Revolution of the Republic of United Ukraine®"?


Fri, 02/28/2014 - 13:17 | 4489695 ZeroPoint
ZeroPoint's picture

Bagdad Bob, is that you?


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