Abstract

The current foreign exchange activity of the bank takes place in conditions of economic uncertainty. Uncertainty means functioning in an economic environment that is constantly changing and complicated by a large number of factors. These factors are difficult to predict. The effect of uncertainty on the foreign exchange market is a consequence of sharp fluctuations in exchange rates. Currency fluctuations provoke an increase in the level of risks and unpredictable changes in financial results in banks. Therefore, managing the foreign exchange activities of banks is a complex process and requires financial managers to make effective management decisions. It is established that the state of the foreign exchange market determines the conditions of banks in it. A retrospective analysis of the dynamics of the foreign exchange market of Ukraine was conducted. In 2014-2015, the foreign exchange market developed under the influence of destructive factors. During this period, the hryvnia exchange rate devalued. Therefore, the NBU has applied a number of administrative measures. In 2016, the process of stabilizing the hryvnia against the US dollar began. In 2018–2019, the hryvnia exchange rate strengthened. However, the COVID-19 pandemic has changed trends in global commodity and financial markets. The influence of these factors changed the exchange rate trend in the foreign exchange market in Ukraine. The hryvnia devalued against the US dollar in 2020. In 2021, the exchange rate gradually stabilized. It is established that failure of banks to take into account the influence of these factors contributes to the growth of risks and deterioration of financial results. Therefore, it is important to create a system of management decisions in conditions of uncertainty. Such a system should consist of preventive and reactive measures. Preventive measures include the development and implementation of a set of solutions that will prevent possible threats. Reactive measures are formed when problems arise. These measures are formed at the expense of internal reserves and/or attraction of resources from external sources. If these measures do not work, the bank must change its currency strategy.

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