RESOLUTION OF NATIONAL BANK OF THE REPUBLIC OF MOLDOVA

of November 28, 1997 No. 41

About approval of Regulations on open foreign exchange position of bank

For the purpose of execution of provisions of article 11 of the Law on National Bank of Moldova and   in connection with transition to the new   Chart of accounts No. 55/11-01 of financial accounting in banks and other financial institutions of the Republic of Moldova the Administrative Board of National Bank of Moldova DECIDES:

1. Approve Regulations on open foreign exchange position of bank it (is applied).

2. These regulations become effective since January 1, 1998. The report on open foreign exchange position of bank as of the end of day 31.12.97 shall be submitted in two forms: according to form from the Procedure No. 10018-16-1 and according to form from the Regulations mentioned in item 1 of this resolution.

3. This resolution becomes effective from the moment of approval with the subsequent publication in Monitorul Oficial al Republicii Moldova.

Approved by the Resolution of Administrative board of National Bank of Moldova of January 28, 1997, No. 126

Regulations on open foreign exchange position of bank

I. Basis

1.1. These regulations are developed according to the powers of National Bank of Moldova provided by Articles 11, of 44, of 46, of 51, 52 Laws No. 548/1995 on National Bank of Moldova (pereopublikovan: The official monitor of the Republic of Moldova, 2015, Art. No. 297-300, 544), with subsequent changes, and Art. 83 of the Law No. 202/2017 on activities of banks (The official monitor of the Republic of Moldova, 2017, Art. No. 434-439, 727), with subsequent changes.

1.2. These regulations are applied to banks with the location in the Republic of Moldova, and also to departments of banks of foreign states which are licensed by National Bank of Moldova (further – banks).

II. Purpose

2.1. For the purpose of reduction of currency risks and control of them these regulations the National Bank of Moldova sets limits of the relation of open foreign exchange position, the rule of calculation and maintaining open foreign exchange position by banks, and also procedure for representation to National Bank of Moldova for reports on open foreign exchange position for banks.

III. Main determinations

For the purpose of these regulations the following determinations are entered:

3.1. Foreign exchange position - remaining balance of currency assets and liabilities of bank which creates risk of receipt of additional incomes or expenses in case of change of the currency rates.

3.1-1. Currency assets - balance sheet assets of bank in foreign currency and the balance sheet assets in Moldovan lei tied to the foreign exchange rate and also contingent (off-balance) assets according to transactions which assume conversion of foreign currency.

3.1-2. Currency obligations - book commitments of bank in foreign currency and the book commitments in Moldovan lei tied to the foreign exchange rate and also contingent (off-balance) obligations according to transactions which assume conversion of foreign currency.

3.2. The foreign exchange position is considered closed if currency assets in certain foreign currency are equal to currency obligations in the corresponding currency.

3.3. The foreign exchange position is considered open if currency assets in certain foreign currency are not equal to currency obligations in the corresponding currency.

3.4. The size of open foreign exchange position is difference between the amount of currency assets in certain foreign currency and the amount of currency obligations in the corresponding currency.

3.5. The open foreign exchange position is long if the amount of currency assets in certain foreign currency exceeds the amount of currency obligations in the corresponding currency.

3.6. The open foreign exchange position is short if the amount of currency obligations in certain foreign currency exceeds the amount of currency assets in the corresponding currency.

3.7. The relation of open foreign exchange position is the relation between the size of the open foreign exchange position (converted into Moldovan lei) expressed as a percentage and the size of own means of bank.

3.8. Limits of open foreign exchange position are the extreme values of open foreign exchange position established by National Bank of Moldova which shall be observed by banks.

3.9. Determinations "the transaction spot", "the transaction the forward" and "currency transaction swap" have the values determined by the Regulations about implementation of transactions in the interbank foreign exchange market of the Republic of Moldova approved by the Resolution of Administrative board of National Bank of Moldova No. 8 of January 24, 2013, Monitorul Oficial al Republicii Moldova, 2013, No. 36-40, of Art. 234.

IV. Basic provisions

4.1. Banks have the right to have open foreign exchange position if other is not provided by acts NBM, including measures or the inflicted sanctions and the authorizing measures, the published NBM in relation to specific bank. To have open foreign exchange position, banks shall have system of maintaining and control of currency risks.

4.2. Transactions which influence the size of open foreign exchange position are:

4.2.1. Charge of interest incomes in foreign currency and receipt of operating incomes in foreign currency;

4.2.2. Charge of interest expenses in foreign currency and payment of operating expenses in foreign currency;

4.2.3. Transactions on purchase sale of foreign currency for Moldovan lei at the expense of means of bank, the transaction on purchase of one foreign currency for other foreign currency, i.e. transaction on conversion of currencies (spot, the forward, etc.);

4.2.4. And/or Moldavian pour other currency transactions in accordance with the terms of which exchange (conversion) of currencies is provided in this or that type (foreign).

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