Operations with international reserves: essence disclosure in NBU financial reporting

Harkusha Yuliya
PHD in Economy, Аssociate professor of the Department of Banking, Odessa National Economic University, Odessa, E-mail:yulyaharkusha@gmail.com, ORCID ID: https://orcid.org/0000-0002-4584-830X

Cite this article:

Harkusha Y. (2021) Operations with international reserves: essence disclosure in NBU financial reporting. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Operatsii z mizhnarodnymy rezervamy: rozkryttia sutnosti u zvitnosti NBU; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odessa National Economic University (ISSN 2313-4569), Odessa National Economics University, Odessa, No. 9-10 (286-287), pp. 28-32.

Abstract

An important component of the state's economic security is the effective monetary policy of the central bank and, in particular, the implementation by the regulator of effective currency regulation, which provides, inter alia, quality management of international reserves. Changes in the volume and structure of gold and foreign exchange reserves are reflected in the balance sheets of the NBU and banks, which in turn affects the money supply, inflation, because the central bank's operations with foreign exchange values are a tool to change the money supply and non-cash issue channel. The adequacy of the country's international reserves is a guarantee of economic development and an important safeguard against currency imbalances in the market, which confirms the relevance of this study. The article highlights the theoretical and practical bases of the impact of changes in the volume and structure of international reserves in the NBU balance sheet. A detailed analysis of the structure and dynamics of international reserves and their reflection in the balance sheet of the central bank. The structure of the NBU securities portfolio was also analyzed in terms of securities ratings. According to the results of the assessment, the state of the regulator's balance sheet changes under the influence of international reserves made due to promotion, dynamics of volume, changes in the structure of international reserves through foreign exchange intervention in the foreign exchange market. their actions. The NBU's foreign exchange transactions in the foreign exchange market are one of the three channels of non-cash issuance. In different periods of the country's development, the actions of these channels changed. Analysis of individual items of the NBU balance sheet, which reflect international reserves, suggests that during the period under review, the regulator changed the monetary policy for the management of international reserves, in particular by placing most of them in securities of non-residents. It should be added that the liquidity of such assets is lower than funds and deposits in foreign currency and bank metals, which affects the ability to intervene if necessary by the central bank in the foreign exchange market.

Keywords

international reserves, balance sheet, central bank, monetary policy, monetary policy.

JEL classification: Е500, Е510, Е520, Е580; DOI: 10.32680/2409-9260-2021-9-10-286-287-28-32

UD classification: 336.7

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