The paper is devoted to the study of the evolution of foreign exchange regulation
formation according to political and economic changes in the world. The common and
different features of "foreign exchange regulation" and "foreign exchange control"
have been indicated. The main stages of foreign exchange regulation process have been
identified and characterized.
The question of regulating the foreign exchange market as a necessary platform
for producing cross-border movement of currency values is topical in today's global
world

Artemenko, A.

English

SocioEconomic Challenges Journal (Sumy State University)

МІНІСТЕРСТВО ОСВІТИ І НАУКИ УКРАЇНИ 
СУМСЬКИЙ ДЕРЖАВНИЙ УНІВЕРСИТЕТ 
ФАКУЛЬТЕТ ІНОЗЕМНОЇ ФІЛОЛОГІЇ 
ТА СОЦІАЛЬНИХ КОМУНІКАЦІЙ 
 
 
 
 
 
 
 
 
 
 
 
СОЦІАЛЬНО-ГУМАНІТАРНІ 
АСПЕКТИ РОЗВИТКУ СУЧАСНОГО 
СУСПІЛЬСТВА 
 
 
 
МАТЕРІАЛИ VІІ ВСЕУКРАЇНСЬКОЇ НАУКОВОЇ КОНФЕРЕНЦІЇ 
СТУДЕНТІВ, АСПІРАНТІВ, ВИКЛАДАЧІВ ТА СПІВРОБІТНИКІВ 
 
 
 
 
 
 
(Суми, 18-19 квітня 2019 року)  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Суми 
2019 
194 
 
A. Artemenko, 
PhD student, Sumy State University 
 
THE MAIN SET OF FOREIGN EXCHANGE REGULATION THEORY 
 
The paper is devoted to the study of the evolution of foreign exchange regulation 
formation according to political and economic changes in the world. The common and 
different features of "foreign exchange regulation" and "foreign exchange control" 
have been indicated. The main stages of foreign exchange regulation process have been 
identified and characterized. 
The question of regulating the foreign exchange market as a necessary platform 
for producing cross-border movement of currency values is topical in today's global 
world.  
Firstly, in any activity that involves cash flow there is a risk of "money 
laundering" done by various participants of the market such as TNCs, banks, dealers, 
brokers, insurance and investment companies, governments, pension and hedge funds. 
Besides, foreign exchange market is a highly liquid sector in the world economy and it 
is continuing to grow. At least, there is a need for its regulation and control in order to 
protect and support national and international efforts in the fight against the financial 
crime.  
Many foreign and domestic scientists such as M.Bageri, Tu Kong, L.Gural, 
M.Epiren, J.Kirchner, S.Ya.Borinets, O.V.Emelin, V.A.Yushchenko and others made 
a significant contribution to the development of foreign exchange regulation theory. 
However, there is still no commonly accepted concept that fully describes the 
essence and mechanism of foreign exchange regulation due to the presence of various 
scientific schools, approaches to the classification of foreign exchange operations, 
availability of different currency legislation in many countries that may contradict each 
other.  
The evolution of foreign exchange regulation formation includes five stages:  
195 
 
1. Foreign-exchange market formation (V–XIX centuries). The appearance of the 
first metal money and the beginning of carrying out foreign exchange operations by 
Italian coin dispensers.  
2. The period of a gold standard (XIX–20-30s of the XX century). Countries 
started to determine the value of their currencies as a certain amount of gold.  
3. The establishment of a multilateral system of payments (1944-1970s). The 
value of each currency had begun to measure as a fixed amount of gold and exchange 
rates were maintained as pegged exchange rates within horizontal bands [1]. 
4. Foreign exchange market liberalization (1970–1980s). The price of currency 
began to depend on how much it was needed for purchasing of goods, investing and 
providing interstate transactions.  
5. Technological revolution in foreign exchange market (1980s–present). All 
transactions are conducted by using different electronic technologies, national financial 
markets develop actively, and banks are allowed to carry out currency transactions with 
non-residents [2]. 
Considering the essence of foreign exchange regulation, it was discovered that 
there is a problem with its interpretation. For example, foreign scientists tend to 
identify "foreign exchange regulation" as "foreign exchange control" and give them the 
same toolkit [3]. On the contrary, in the Ukrainian legislation, they are outlined as 
absolutely two different things with distinct content, objects, entities, and methods of 
implementation. 
As a result, it should be noted that the preliminary term of foreign exchange 
regulation is more common and means a process of taking the measures by central 
government or special country`s authority concerning the buying and selling of 
currency, the exchange rate maintenance, regulation of foreign exchange market 
through special laws, rules and decrees to control, coordinate and restrict currency 
operations (Tu Hong) [3]. Therefore, it has become obvious that foreign exchange 
control is one of the stages of foreign exchange regulation process (figure 1). 
196 
 
 
Figure 1 – Stages of foreign exchange regulation process [4] 
 
At the first stage, goals, tasks and methods for their achievement are established 
in the context of country`s monetary policy (1). Next, a number of special legal acts 
for foreign exchange market regulation should be amended and introduced (2). Then 
the implementation of all developments takes place (3). Subsequently, banks, tax, and 
customs authorities must control how the foreign exchange regulation system works 
for the purpose of detection of all illegal transactions carried out by both residents and 
non-residents (4). If there are some problems, some adjustments must be made (5) [4].  
So we can sum up that foreign exchange regulation is a set of special institutes, 
authorities, individuals involved in currency relations. On top of that, it should provide 
a sustainable development of the national foreign exchange market based on the IMF`s 
principles of legitimacy, impartiality, transparency, optimal state regulation, equality, 
complexity, stability and efficiency [1]. 
 
References: 
1. Articles of Agreement of the International Monetary Fund [Electronic resource]: 
International Monetary Fund 31.05.68 № 23-5. – Mode of access : 
http://www.imf.org/external/pubs/ft/aa/pdf/aa.pdf. 
2. Min S., CHor Khoon C. Foreign Exchange Risk in the FDI decision [Electronic 
resource] / S. Min, C. CHor Khoon // UBS Investment Bank (A Case Study of Myanmar 
Currency’s Exchange Rates). – Mode of                                         access : 
http://www.ibb.ubs.com/Individuals/files/brochure/booken.pdf. 
5. System adjustment
4. The analysis of the regulatory system efficiency 
3. The implementation of all developments
2. The ammendment and introduction of special legal acts
1. The establishment of goals, tasks and methods for archieving
197 
 
3. Tu Hong. Foreign Exchange Control in China/ Tu Hong// Kluwer Law International, 
the Hague. – 2004. – pp. 289. 
4. Sas B., Tkachuk V. Problems of design and development of human communities 
self-organization forms [Electronic resource] / B. Sas, V. Tkachuk // International Academy 
of Scienses and Higher Education (International Conference Project), Lindon, Great Britain. 
– Mode of access: http://gisap.eu/ru/node/523. 
 
English Language Advisor: A. M. Diadechko – PhD in Philology, Associate 
Professor of foreign languages department,  Sumy State University 
 
 
Svitlana Podolkova,  
PhD of Philology, assistant professor, 
Foreign Language Department, Sumy State University 
 
ESSAY AS A FORM OF ACADEMIC WRITING 
 
Common information society actualizes the problem of foreign language study 
by students and graduate students of non-linguistic specialties. The benefit of acquiring 
skills to write academically gives opportunity to participate in international 
conferences, to publish research papers in various journals.   
Actuality of the paper is determined by the importance of academic writing, 
particularly academic essays, for contemporary students and post-graduate students, as 
they are expected to write a lot of written works like dissertation, thesis writing, 
coursework writing, research paper writing, and essay writing, etc. Academic writing 
teaches students to analyze and choose useful information for further research, to look 
at the ideas from a different prospective and to convey concepts and obtained results 
best to their target readers. 


The main set of foreign exchange regulation theory

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The main set of foreign exchange regulation theory

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SocioEconomic Challenges Journal (Sumy State University)