Ukraine Eases Draconian Currency Curbs

Ukraine's central bank has eased some of its most draconian currency restrictions as the cash-strapped country slowly returns to economic growth after more than two years of war.

The National Bank of Ukraine (NBU) said late Wednesday that it was removing daily limits on the amount of local currency people can withdraw from their accounts.

The bank had previously slapped a ceiling of 500,000 hryvnias ($20,000 / 17,600 euros) on withdrawals in a bid to stop a depreciation that saw the currency lose about two-thirds of its value over a two-year stretch ending in 2015.

It also doubled the daily amount of foreign currency Ukrainians can purchase to about $40,000.

Various versions of strict banking regulations have been in place since Ukraine went into an economic tailspin with the outbreak of an April 2014 revolt in the pro-Russian industrial east.

Growth contracted by 9.9 percent of gross domestic product (GDP) last year due to the heavy cost of funding the army and the near paralysis of output in the eastern rustbelt.

The 26-month eastern conflict that Kiev and its Western allies accuse Russia of plotting and backing has killed nearly 9,400 people and dampened the appetite of foreign investors to stake their fortunes on Ukraine.

But the former Soviet republic saw annualised growth tick up by 0.1 percent of GDP in the first three months of the year -- its first stetch of sustained expansion since 2013.

The pro-Western authorities in Kiev who rose to power in the wake of Ukraine's February 2014 pro-EU revolution expect the economy to expand by 1.1 percent this year.

"In our view, the dynamics in the next quarters should improve, but the risk of downward trend is still high," economists at Austria's Raiffeisen Bank said in a research note.