As reported, the concept implies the freedom of conducting currency transactions under the principle “everything, which is not expressly forbidden, is permitted”.
“It means that any currency transactions between residents and between residents and non-residents in foreign and national currency will be conducted without limitation”, according to the message.
Such model of currency regulation, the press office reports, is not more liberal, but also complies with international practice – EU Directive 88/361/EEC on the free movement of the capital – and EU-Ukraine Association Agreement.
Also, according to NBU, if the new model of currency regulation is introduced, the market instruments should prevail over administrative ones.
The regime of free movement of the capital implies the absence of currency restrictions, and, consequently, does not require any currency control as the instrument to observe its restrictions. But the observance of currency legislation fully rests with the currency supervision.
“Under the liberal model of currency regulation, the approach to NBU’s application of restrictions on the currency market should also change”, NBU reports.
According to the message, the currency restrictions should be introduced only for overcoming or preventing the crisis for a short period.
The National Bank plans to discuss the specified proposals on the legislative changes with business representatives, the banking sector, the expert community and public institutions within the next three weeks.
“Taking into account the comments, which we will receive, NBU proposals will be presented to the National Reforms Council”, NBU Deputy Governor Oleg Churii told.
“We hope that our vision of steps, necessary for a transition to the liberal model of currency regulation, will find support with the National Reforms Council”, he added.
In accordance with NBU’s proposals, after approving the Law on Currency, the Verkhovna Rada will need six months for a transitional period for approval of regulatory acts of the regulator with the provisions of law. Then the law will come into force.
