Currency market in Ukraine

The introduction of a new currency would have been impossible without a well developed and efficient currency market. Ukrainian legislation requires the mandatory conversion, through authorised banks on the Interbank Currency Market of Ukraine, of 50 per cent of foreign currency received by residents at the market rate. Such a requirement led to the development of the currency market in Ukraine with over $350mn traded monthly on the Interbank Currency Market alone, even though hard currency receipts of enterprises with foreign investments from sales of products, services or works produced by themselves are exempt.

Further exemptions from the 50 per cent mandatory conversion are:

· Payments in foreign currency received on the account of a Ukrainian resident acting as on agent under a contract of agency provided that those payments are transferred to the principal selling entity, which can be resident or non-resident.

· Investments in foreign currency contributed to the authorised capital of legal entities with foreign investments by foreign investors.

· Payments in foreign currency received by Ukrainian citizens (except Ukrainian sole proprietors) from non-residents of Ukraine.

· Foreign currency purchased at the Interbank Currency Market.

· Foreign currency reserves of authorised bonks.

Residents and non-residents of Ukraine need on individual license from the National Bank of Ukraine for effecting currency operations, except for:

· Foreign currency which was duly brought into Ukraine at an earlier date.

· Foreign currency payments related to foreign trade transactions.

· Foreign currency payments related to credit, interest and dividends.

· Foreign and Ukrainian currency taken out of Ukraine by residents of Ukraine (up to the limits specified by the National Bank of Ukraine).

· Repatriation of foreign investment amounts in the case of termination of investment activity.

Bringing foreign currency into Ukraine is not subject to licensing.

Exercise 1. Match the words (1-10) on the left with their translation (a-l) on the right.

1. ore enrichment factory a. система збору податків

2. lack b. розвал, розпад

3. breakdown c. тверда (вільноконвертована) валюта

4. foreign exchange reserve d. конвертована валюта

5. vault e. рудозбагачувальний комбінат

6. convertible currency f. податкова служба

7. tax collection system g. надходження від податків

8. devaluation h. валютний резерв для торгівлі закордоном

9. tax collecting agency i. девальвація

10. tax revenue j. бухгалтерський баланс

11. balance sheet k. нестача, відсутність

12. hard currency l. сховище

Exercise 2. Now use some of the words from Exercise 1 in the following sentences.

1. ______ istraded in a foreign-exchange market. There is consistent demand for it and, therefore, it is unlikely to decline significantly in value.

2. In Fort Knox the gold is kept in a steel and concrete _____ beneath the building.

3. Of the two traditional types of financial statements, the _____ relates to an entity's position, and the income statement relates to its activity.

4. Bank for International Settlements (BIS) is an international bank founded in 1930 and now it assists about 90 central banks in managing and investing their monetary reserves, which amounted to more than 10 percent of world _____.

5. _____ often is criticised as an inflationary monetary policy because it raises the domestic price of imports.

6. The Soviet Union exported sizable amounts of gold, diamonds, platinum, and nickel to earn _____ (the Soviet currency was non-convertible to foreign currencies and could not be used to purchase imports).

Exercise 3. Find the following information (in reference books or in the Internet).

1. What did the name ‘hryvnia’ come from?

2. What is the symbol for the hryvnia and when was it introduced?

3. What is the future of the hryvnia?

Дата добавления: 2015-08-03