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National currency system of Ukraine has not yet been finalized. ... National currency system of Ukraine has been designed in accordance with the structural principles of the world currency system, which is in line with Ukraine’s strategic orientation toward integration into world economy.
Ukrainian Hryvnia is the foundation of the Ukrainian currency system. Ukrainian national currency history starts from the moment when Ukraine regained its independence in 1991. Before 1991, Ukraine, being a republic of the former USSR, used ruble for its currency. Ukraine had to create its national currency system from scratch, for the one that existed before was not a national one.
For some time after it regaining its independence, Ukraine continued to use ruble as its currency. In October 1992, the leaders of twelve former USSR republics gathered in Bishkek, Kyrgyzstan to sign an agreement on common monetary system and uniform monetary policy among former USSR states. According to this agreement, the ruble would preserve the status of a legal common currency. ... In the realm of currency policy, NBU establishes currency exchange rate regimes and quotes foreign currency in the currency of Ukraine. Also, NBU accumulates, preserves, and uses foreign reserves to carry out the states currency policy. Moreover, NBU issues licenses authorizing the fulfillment of currency transactions and decides about their abrogation. Apart from these regulatory functions in the domain of currency policy, the NBU also fulfills controlling functions. Namely, it supervises the observance of the rules for currency transactions on the territory of Ukraine and ensures the fulfillment by the authorized banks of functions concerning the implementation of currency control.
On January 10th, 1992, Ukraine started its monetary reform: a new national currency-Karbovanets (Kupon)-was introduced into circulation. This currency was to be a provisional one. ... In June 1992, the formation of the Stabilization Fund for Ukrainian National Currency began. ... The settlement-cash center served to temporarily facilitate trade with CIS members until the Currency Exchange of the NBU was created in August 1992.
Within a domestic scope Karbovanets was the main currency. ... Karbovanets were to function as the only provisional currency in Ukraine. ... Although the strict fixation of the exchange rate in Ukraine that lasted from August 1993 to October 1994 was meant to create value for the currency , in reality it mostly exacerbated the negative condition peculiar to the crisis in the countrys economy such as reduced exportation of products paid for in foreign currency and the volumes of outputs of import-dependent enterprises, decreased receipts of hard currency on the internal currency market of Ukraine, and increased outflow of capital abroad. Toward end of 1994, it became apparent that steps were needed to provide gradual liberalization and decentralization of the currency market.
Approximate Word count = 2241
Approximate Pages = 9
(250 words per page double spaced)
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