National Bank of Ukraine (NBU)
National Bank of Ukraine (NBU, Ukr. National Bank of Ukraine) - the central bank of the country. The NBU is a legal entity, state-owned and has an authorized capital of UAH 10 million. The main function of the NBU is to maintain the stability of the national currency, the Ukrainian Hryvnia, as well as price stability and the banking system, within the limits of its authority.
History of the National Bank of Ukraine
The starting point for the establishment of the NBU is the Law "On Banks and Banking Activity" adopted by the Verkhovna Rada of Ukraine on March 20, 1991. The NBU was based on its predecessor, the Ukrainian Republican Bank of the USSR Gosbank.
In the nineties of the last century Ukraine was faced with the complete unsuitability of the financial system to market conditions, as well as with monstrous Inflationwhich was as high as 10,200% per year.
Introduced in 1991, the currency "Karbovaniec", popularly known as "coupons", was considered an intermediate currency and was not originally intended to be used as an independent monetary unit.
Between 1994 and 1996, Ukraine underwent a large-scale financial reform, which resulted in the introduction of a new currency, the hryvnia, by the NBU, and overcame industrial recession and hyperinflation.
The NBU in our time
According to the Constitution of Ukraine, the main function of the National Bank is to ensure stability of the monetary unit of the country. In performing this function, the National Bank should proceed from the priority of achieving and maintaining price stability in the state.
The NBU, in accordance with the Law "On the National Bank of Ukraine", is the central bank of the state - a special central government body. The Central Bank monopolizes the issuance of the national currency and organizes its circulation, is the lender of last resort for banks and organizes the refinancing process, establishes the system, procedure and forms of payments, including between banks, sets the rules for banking operations, and carries out banking regulation and supervision.
The National Bank of Ukraine carries out currency regulation, determines the procedure for foreign currency transactions, organizes and exercises currency control over banks and other financial institutions that have obtained a license from the NBU to conduct currency transactions.
The Central Bank sets and announces the official exchange rate of the hryvnia against foreign currencies. It establishes denominations, security systems, payment signs, design of monetary signs, and preserves their reserve funds.
The NBU's functions also include the safekeeping of bank and precious metals, stones and other valuables. The Bank places foreign exchange reservesperforms operations with them. The CBR establishes the procedure for determining the discount rate and other interest rates for its operations; licenses banking activities and operations in cases prescribed by law; and sets mandatory reserve requirements for banks.
Useful links about the NBU
- Website of the National Bank of Ukraine: bank.gov.ua
- Hryvnia is the national currency of Ukraine