Monetary policy of the national bank of Ukraine in the period of war

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

Cite this article:

Harkusha Yu. (2024) Monetary policy of the national bank of Ukraine in the period of war. Ed.: V.V. Kovalenko (ed.-in-ch.) and others [Monetarna polityka natsonalnoho banku Ukrainy u period voiennoho stanu; za red.: V.V. Kovalenko (gol. red.)], Scientific Bulletin of the Odesa National Economic University (ISSN 2313-4569), Odesa National Economics University, Odesa, No. 3-4 (316-317), pp. 41-47.

Abstract

The purpose of the research is to improve the theoretical and methodological foundations of the monetary policy of the National Bank of Ukraine under martial law. The article highlights the theoretical and practical foundations of the monetary policy of the National Bank of Ukraine. Characteristic features of the use of monetary policy instruments during the period of martial law are highlighted. It is noted that the stabilization of the economic situation, the state of the domestic money market, and the adaptation of the banking system to new conditions gave the National Bank of Ukraine the opportunity to improve the operational design of monetary policy, which made it possible to curb inflationary processes and ensure the protection of time deposits. The following changes have taken place in the monetary policy of the National Bank of Ukraine: reduction of the rate on overnight deposit certificates; introduction of a new instrument – limited three-month deposit certificates at a fixed rate equal to the discount rate. A detailed analysis of the dynamics of the volume and specific weight of domestic state loan bonds in the structure of the balance sheet of the National Bank of Ukraine was conducted, on the basis of which a conclusion was made about a significant increase in the volume of government bonds in the assets of the National Bank of Ukraine. The change in the volume of international reserves, currency interventions, and the exchange rate was analyzed, and the reasons for the change were determined. The dynamics of the official exchange rate, the exchange rate on the cash and "gray" markets were studied separately. On the basis of the conducted research, conclusions were formed and specific proposals were made regarding the improvement of the monetary policy of the National Bank of Ukraine. It is noted that it is advisable to return to the practice of classical inflation targeting, provided the necessary economic environment is created, characterized by such features as balanced state finances; a developed domestic financial market, a low level of dollarization of the economy, coordination of monetary and fiscal policy, which requires the National Bank of Ukraine to take effective actions to achieve these benchmarks.

Keywords

central bank, monetary policy, monetary policy instruments, discount rate, exchange rate.

JEL classification:Е520; Е580; F350; DOI: https://doi.org/10.32680/2409-9260-2024-3-4-316-317-41-47

UD classification: 336.7

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