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The National Bank will only be set to conduct monetary liberalization in Ukraine if no threats are present to the country's financial stability.
Full currency liberalization and transition to a liberal model of currency regulation increase the vulnerability of the country's financial system and economy to various shocks, therefore they are impossible without the central bank being able to respond to crises, the NBU press service reported referring to Deputy Governor Oleh Churii.
"Our liberalization concept is based on allowing free capital flow, and this really results in the growth of investment inflow, while our businesses feel freer. But on the other hand, any liberalization creates certain risks for financial stability. Therefore, our approach is to go for liberalization only if this doesn't threaten financial stability," Churii explained.
According to the Deputy NBU Governor, when there is capital outflow from emerging economies, first of all it's those countries that are most vulnerable that suffer most, which is evidenced by the current situation in Argentina, where the loss of investors' interest, even under the new support program from the International Monetary Fund, provoked a financial crisis and a significant devaluation.
Read alsoNBU unlikely to ease monetary policy until "strong disinflation tendency" seen
As UNIAN reported earlier, on May 17, the Verkhovna Rada of Ukraine adopted as a basis the presidential bill on currency, which will replace the outdated decree of the Cabinet of Ministers of Ukraine of 1993 "On the system of currency regulation and currency control" and lays down the principle "everything which is not directly forbidden by law is allowed."
In particular, under the new law, banks will be able to conduct forex transactions without additional licenses required, while businesses – to receive loans from non-residents without their registration, and citizens – to invest abroad without individual NBU licenses.
Also, the law will abolish the maximum deadline for settling export and import contracts for businesses within 180 days and sanctions for violations in the form of a fine amounting to 100% of the operation's volume and a ban of foreign economic activity.
Besides, the new law abolishes currency control of smaller settlements, retaining only the already enforced financial monitoring of transactions over UAH 150,000.