№ 2/2020

Fìnansi Ukr. 2020 (2): 7–24https://doi.org/10.33763/finukr2020.02.007

MONETARY POLICY

DANYLYSHYN Bohdan ¹

¹Kyiv National Economic University named after Vadym Hetman
OrcID ID : https://orcid.org/0000-0002-4058-1191

Prospects for improving the monetary policy of Ukraine

The article indicates that due to the unpredictability of crisis phenomena threats, risks of market imbalance in the application of monetary regulatory mechanisms by state power structures, it is extremely important to combine monetary and credit regulation in the space and time dimension with flexible banking reforms subject to further stabilization of banking institutions. The control and regulation of the movement of assets in the economy by the National Bank of Ukraine by means of inflation targeting and managed floating exchange rates should be aimed at sustainable growth of all components of the domestic socio-economic system. The purpose of the article is to identify scientifically sound approaches to the development and implementation of effective government monetary policy. It is concluded that, in the future, monetary regulation should provide for improvements in transmission mechanisms that would stimulate the credit activity of the banking system to support the real sector, enhance employment and economic growth. It is fundamentally important to further improve the configurations of the network forms of interaction of all parties to the contractual relations under different variants of the NBU actions and behavioral reactions of economic agents. Authorities have been offered a number of recommendations on budgetary regulation, as well as measures to address structural distortions in the internal financial market related to the dominance of government borrowing. The stability of the national currency exchange rate and the cost of credits significantly impact the development of the economy, namely: the evolution of consumption, investments, foreign trade, activity of economic entities, population employment rate . Therefore, based on the implementation of the outcomes of fundamental trends analysis of the exchange rate strengthening, the evaluation of the balance of payments current account balance in the medium term, it is necessary to review the tactics of achieving the inflation target taking into account negative risks, in particular by limiting the NBU presence in the domestic currency market, raising the role of the interest rate, strengthening the requirements to banks for reserve policy, etc.

Keywords:monetary policy, inflation targeting, central bank discount rate, banking stability, monetary policy, stimulation of economic growth

JEL: E44, E52, H58, H60

Danylyshyn B. . Prospects for improving the monetary policy of Ukraine / B. . Danylyshyn // Фінанси України. - 2020. - № 2. - C. 7-24.

Article original in Ukrainian (pp. 7 - 24)

Download

Downloads :300

1. Simons, H. (1948). Economic Policy for Free Society. Chicago: The University of Chicago Press.
2. Bernanke, B., Gerlter, M. (1989, March). Agency Costs, Net Worth, and Business Fluctuations. American Economic Review, 79 (1), 14–31.
3. Meltzer, A. (1995). Monetary, Credit and (Other) Transmission Processes: A Monetarist Perspective. Journal of Economic Perspectives, 9 (4), 49–72. DOI: 10.1257/jep.9.4.49.
doi.org/10.1257/jep.9.4.49
4. Van den Heuvel, S. (2002). Does Bank Capital Matter for Monetary Transmission. FRBNY Economic Policy Review, 8 (1), 259–265. Retrieved from www.newyorkfed.org/medialibrary/media/research/epr/02v08n1/0205vand.pdf.
5. Estrella, A. (2002). Securitization and the Efficacy of Monetary Policy. FRBNY Economie Policy Review, 8 (1), 1–13. Retrieved from www.newyorkfed.org/medialibrary/media/research/epr/02v08n1/0205estrpdf.pdf.
6. Kuttner, K., Mosser, P. (2002). The Monetary Transmission Mechanism: Some Answers and Further Questions. FRBNY Economie Policy Review, 8 (1), 15–26. Retrieved from pdfs.semanticscholar.org/658c/760f44d986f99f2d21e51c632689b4fe58af.pdf.
7. Schinasi, G. (2003). Responsibility of Central Banks for Stability in Financial Markets. IMF Working Paper, WP/2003/121. doi.org/10.5089/9781451854404.001
8. Verkhovna Rada of Ukraine. (1996). Constitution of Ukraine (Law No. 254k/96-BP, June 28). Retrieved from zakon.rada.gov.ua/laws/show/254%D0%BA/96-%D0%B2
%D1%80#n4599 [in Ukrainian].
9. Verkhovna Rada of Ukraine. (1999). About the National Bank of Ukraine (Law No. 679-XIV, May 20). Retrieved from zakon.rada.gov.ua/laws/show/679-14 [in Ukrainian].
10. National Bank of Ukraine. (2019). On Approving the Procedure for Developing the Fundamental Principles of Monetary Policy and Exercising Control over its Implementation (Decision No. 27-rd, June 26). Retrieved from zakon.rada.gov.ua/laws/show/vr027500-19/
sp:max10 [in Ukrainian].
11. National Bank of Ukraine. (2020). On the activities of the Board of the National Bank of Ukraine on the implementation of the Fundamental Principles of Monetary Policy in 2019 (Decision No. 123-rsh, February 13). Retrieved from zakon.rada.gov.ua/laws/show/vr004500-20 [in Ukrainian].
12. Verkhovna Rada of Ukraine. (2018). About currency and currency transactions (Law No. 2473-VIII, June 21). Retrieved from zakon.rada.gov.ua/laws/show/2473-19 [in Ukrainian].
13. National Bank of Ukraine. (2019, April). Inflation report. Retrieved from bank.gov.ua/news/all/inflyatsiyniy-zvit-za-kviten-2019-roku [in Ukrainian].