Liberalization of the Legislation on Currency: Causes and Consequences

Abstract

The article is concerned with researching the status of the regulatory legislation on the foreign economic activities in Ukraine, analyzing legislative changes in the sphere of foreign economic operations, defining their causes and predicting the consequences. The creation of favourable legislative and tax conditions in the area of export-import operations will facilitate increase in the volume of foreign investment in Ukraine, which, in turn, will stimulate construction of new production enterprises, increase in the number of jobs and income growth of the population, and, accordingly, growth of the national economy as a whole. Works of Ukrainian and foreign scholars, aimed at researching problematic issues in the sphere of foreign economic activity are considered. The experience of other countries’ transition to the system of free floating of capital is analyzed and the existing risks of liberalization of the legislation on currency are defined, which are mainly dependent on the country that implements it. In order to introduce a liberalization of such kind, a country must achieve a sufficient level of economic and institutional development, otherwise the country can be exposed to crisis developments. Key points of legislative changes that are needed to ensure free floating of capital are identified. The reasons for the liberalization of currency legislation are defined, and the impact of the consequences of its introduction on the activities of enterprises and the economy of Ukraine as a whole are forrecasted. Changes in the legal instruments are analyzed and the consequences of their introduction are defined. Further directions of reforming the regulatory acts in the sphere of foreign economic activity, which provide for the easing of currency settlements, are proposed.

Keywords

• foreign economic activity
• currency
• operations with currency
• liberalization
• foreign investment