№ 1/2017

Fìnansi Ukr. 2017 (1): 52–74https://doi.org/10.33763/finukr2017.01.052

MONETARY POLICY

BOHDAN Tetiana ¹

¹NGO “Growford Institute”
OrcID ID : https://orcid.org/0000-0002-6133-5336

Global conditions and country-specific risks for functioning foreign exchange and financial sectors in Ukraine

Abstract. The author identifies the recent trends of global financial development, that effect the trajectory of Ukraine’s economy and require an adaptive response of the national financial policy: economic slacks in developed countries and a slowdown of the economic growth in emerging markets, a sustaining low level of commodity prices and deterioration of economic conditions in commodity-exporting economies, a rise in interest rates in the USA at the end of 2015 and modest foreign capital inflows to emerging markets, elevation of geo-political problems and their negative impact on the global appetite for risks, accumulation of the banking sector problems in developed countries and their negative effects on financial stability prospects. The author highlights current challenges and probable transformations of Ukraine’s economy under the impact of global changes, i.e. conservation of the small export revenue of Ukraine, chronic deficits of the balance of payments, sustaining undervalued hryvna’s exchange rate. All of above indicate the low likelihood of renewal of the foreign capital inflows from private sources and the importance of collaboration with international financial institutions;the necessity to promote national exports and to look for the export alternatives at the markets of rapidly growing economies; better prospects for Ukraine in regard with drawing foreign direct investments from China (conditional, however, upon adequate economic policy in Ukraine) and inclusion into the cross-border infrastructure projects, initiated by China. The author also reveals domestic financial and economic risks, i. e. country specific risks, reasonable assessments of which and undertaking proper measures for their minimization are the matters of utmost urgency, essential for Ukraine’s return to the trajectory of sustainable economic growth. Among the above-mentioned risks, balance of payments risks and exchange rate stability risks, risks of debt sustainability, credit risks and banking sector risks are examined in details.

Keywords:global finances, export revenue, capital inflows, banking sector, debt sustainability, exchange rate, risks minimization.

JEL: F30, F63, H80.

BOHDAN T. . Global conditions and country-specific risks for functioning foreign exchange and financial sectors in Ukraine / T. . BOHDAN // Фінанси України. - 2017. - № 1. - C. 52-74.

Article original in Ukrainian (pp. 52 - 74)

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