Devaluation Of National Currency Research Articles

РОЗВИТОК ВІТЧИЗНЯНОЇ ЕКОСИСТЕМИ СТАРТАПІВ В УМОВАХ ГЛОБАЛЬНИХ ВИКЛИКІВ СЬОГОДЕННЯ

Today, the most significant factor influencing the development of the national economy and the startup sector in particular is the military aggression of the rf against Ukraine. Since the beginning of the war, the domestic economy was under the influence of a number of negative political and socio-economic factors: military actions at the territory of Ukraine, the destruction of the country's economic potential, the threat to territorial integrity, large-scale migration processes, the growth of unemployment and inflation, devaluation of national currency, unfavorable investment climate etc. The analysis of military aggression impact on various sectors of the economy, in particular the startup sector, is gaining relevance for scholars and practitioners. In view of this, the purpose of the article was to determine the features of the current state of the startup ecosystem, as well as the main trends of its development under conditions of today's global challenges associated with the military aggression of the rf. The paper examines the state of the startup ecosystem compared to the pre-war period, establishes the main trends of its development regarding the amount of funding, the structure of priority areas of activity, the geographical location of startups, and the expectations of startup initiators regarding the prospects of functioning in the short term perspectives. The factors contributing to the preservation and further development of the startup industry, despite the military aggression of the rf, were analyzed. The current role of the state in the development of startup ecosystem and the factors determining the features of the development of the IT industry and the startup sector, in particular, were defined. In general, compared to other sectors of the economy, the IT industry and the startup sector, due to the specifics of the business, were less affected by military aggression than other sectors of the economy. Despite the difficulties of wartime, the national startup ecosystem of Ukraine continues to develop, remaining a source of information and technological innovations and, at the same time, adapting to new business conditions and new needs of the country's economy. A promising direction of research on this topic is the determination of the long-term effects of the russian military aggression on the development of the startup ecosystem.

The Impact of the Devaluation Management of the National Currency Against the US Dollar on the Rights of Contractors in Lebanese Law

The article investigates the impact of national currency devaluation management against the US dollar relative to contractor rights. It demonstrates the source of the problem imposed on Lebanon by banking conditions and policies and provides legal solutions to a problem that many contractors still face. This includes an examination of the judicial approach used by Lebanon's judicial bodies to solve legal issues arising from the devaluation of the national currency. According to the article, practice in Lebanon has revealed institutional confusion in determining the value of the national currency in relation to the dollar. To address the issue of assigning the value of the national flag to the dollar, a unified legal system must be established.

Валютные эффекты применения налоговой политики

The article examines the Russian experience in the field of currency regulation and the instruments that affect the exchange rate of the Russian ruble in crisis conditions. It is justified that the dynamics of the Russian ruble exchange rate depends primarily on the influence of four factors: the state of the economy of the issuing country, state monetary and financial policies, price dynamics of international commodity markets, and instability of the global monetary and financial system. It was established that the Russian ruble exchange rate also depends on the volume of foreign currency purchases by the population; a tendency for an increase in demand for foreign currency on the part of the population during the expectations of the Russian Federation (RF) national currency devaluation with a decrease in world oil prices was revealed. Based on an analysis of the currency policy of the Russian Federation, the authors come to the conclusion that curbing the weakening of the Russian ruble in the face of a decrease in the supply of foreign currency in the domestic market is carried out mainly through foreign exchange interventions and offer additional measures aimed at reducing demand on foreign currency through the introduction of tax instruments. Such measures will reduce the dependence of the ruble exchange rate on the volume of foreign currency inflows into the country, which will increase the efficiency of the Russian monetary policy and, as a consequence, the stability of the Russian economy to external adverse factors. In addition, six additional effects were revealed from the implementation of the proposed tax measures, which will strengthen the financial system of Russia. The proposed tax instruments can be applied in other countries, and the resulting increased demand for precious metals affects the global financial system up to its substantial transformation.

ДОЛАРИЗАЦІЯ ФІНАНСОВОГО РИНКУ УКРАЇНИ: ПРИЧИНИ, ЕВОЛЮЦІЯ, НАСЛІДКИ

The purpose of the article is to assess the level of domestic financial market dollarization, find out the causes of this economic phenomenon, trace its evolution and identify current features, substantiate proposals to minimize the negative consequences for the financial market and the economy in general. The methods of theoretical analysis, synthesis and generalization, analysis of statistical data and its graphical interpretation are used in the research. The results of the research showed that the main reasons for dollarization in Ukraine were high inflation and sharp fluctuations in the exchange rate of the national currency. In general, the dollarization of national financial markets occurs through the following channels: 1) borrowing on the international financial market; 2) the entrance of foreign banks to a domestic market; 3) investing abroad, when a national financial market is not sufficiently developed to create high-quality and highly liquid assets, dollarization provides rapid access to foreign financial assets and optimization of the profitability and risk structure of an investment portfolio; 4) the difference (spread) between interest rates in national and foreign currency. Based on the study of the domestic financial market, the following conclusions are made: 1) the level of Ukraine`s financial market dollarization in the aggregate and in terms of its separate segments is high; 2) this level poses a threat to the stable operation of financial intermediaries and the banking system in case of the national currency devaluation; 3) currency imbalance of assets and liabilities in the banking system has strongly decreased since 2008, but is still significant; 4) foreign currency is widely used by economic agents in the shadow sector of the economy. We consider the current dollarization level dangerous for the development of the country's financial system, and its reduction to a scientifically sound natural level should become one of the main tasks of the National Bank of Ukraine. Achieving the natural dollarization level and effective use of the domestic financial market potential will allow to intensify Ukraine's national economy development and promote integration into the international financial market and the global financial space.

Оцінка стану державного боргу України та напрями його оптимізації

The article aims at studying the current state of Ukraine's national debt and developing directions for its optimization. It is established that the currency component in the structure of Ukraine's national debt is slightly lower than the threshold level for the currency component in the debt structure set by the IMF for developing countries. This structure of Ukraine’s national debt indicates the dependence of the domestic financial system on currency exchange rate fluctuations and the need to increase foreign exchange costs for servicing debt obligations. The amount of debt on loans from international financial organizations and government agencies of foreign countries comprises about a third of the total amount of national and guaranteed debt, indicating significant support Ukraine receives from its international partners, especially from the International Monetary Fund. The currency component in Ukraine’s national and state-guaranteed debt indicates high vulnerability of its financial system to currency shocks. It is established that the structure of Ukraine’s national and state-guaranteed debt by types of interest rates is quite optimistic and indicates a low vulnerability of public finances to interest rate risks. The size of Ukraine’s national and state-guaranteed debt in hryvnia equivalent increased during 2013–2020 by more than 4.4 times, and its growth in USD was quite moderate. It is determined that during 2020 the size of Ukraine’s national and state-guaranteed debt increased by 27.7% in hryvnia equivalent, due to the following situations: financing the state budget deficit; the allocation of funds to combat COVID-19; national currency devaluation, etc. The ratio of national and state-guaranteed debt to GDP, reaching a maximum of 81.0% at the end of 2016, gradually decreased to 50.3% at the end of 2019, which corresponds to the norm established by the national legislation. However, the values of this index for the period under review exceed the threshold level of national debt set by international standards for countries with emerging markets (30-50% of GDP). It is shown that the 2013 2019 period saw a tendency to increase the total cost of repayment and servicing of Ukraine’s national debt, which creates the risk of refinancing national debt, causes additional pressure on the state budget and GDP, and limits Ukraine’s ability to finance its social and economic goals of social development. The main risks for Ukraine’s debt obligations are highlighted, and ways to optimize them are outlined. The need to establish a National Debt Management Agency, the activity of which would help reduce both the debt burden and the cost of public debt servicing, is substantiated.

TECHNOLOGICAL RISK ANALYSIS ON CRYPTO CURRENCY ENGINEERING AND DOLLAR HEGEMONY

Amaç: Bu çalışmadaki amacımız, ABD Dolar senyorajının ne boyutta oluğunu tespit etmek ve bunun kripto paraların yükselişiyle etkilenip etkilenmeyeceğini anlamaya çalışmaktır.Yöntem: Bu çoklu disipliner çalışmamızda, henüz yaygınlaşmamış olmakla birlikte özellikle dijital/kripto para mekanizmasının ABD Dolarının küresel ölçekte hegemonyasını sarsabilecek bir potansiyelde olup olmaması noktasında hegemonya, paradigma, senyoraj ve parasal miktar kuramları çerçevesinde çoklu analiz yapılmaktadır.Bulgular: ABD Doları, diğer uluslar tarafından rezerv para, değişim aracı ve değer ölçümü olarak kullanıldığından günümüzde sadece ulusal senyoraj değil, aynı zamanda küresel senyoraj aracı olarak da rakipsiz bir avantaj sağlamaktadır. Bu sayede diğer ulusların rekabet edemeyeceği bir üstünlük elde etmiştir. Türk Lirası (TL) örneğinde görüldüğü gibi pek çok gelişmekte olan ülke paralarının değer kaybından dolayı sıkıntılar yaşamaktadır. Elle tutulur ortamdan e-devlet/MIS dijital alanına kayan devletin parası da aynı eğilim ve metotla sanal ve kripto ortama taşınmak zorundadır. Özellikle Korona Virüs salgını sonrasında kağıt paraların da enfeksiyon bulaştırma riski ön plana çıktığından Dijital Dolar için ABD Senatosunda yasa önerilerinin tartışılıyor olması bu hususta gerekli alt yapının hızlı bir şekilde hazırlanacağı anlaşılmaktadır. Hatta saygın bilim otoriteleri ve politikacılar tarafından Korona Virüsün Endüstri 4.0 için ortam oluşturmak maksadıyla yapay olarak geliştirilmiş olduğu iddialarının/suçlamalarının yanı sıra, pek çok gelişmiş ülkede insanlara mikro chip takılması ve kripto paralara geçilmesi ciddi bir gündem haline gelmiştir.Sonuç: Kripto para mühendisliğinde kullanılan blokzinciri teknolojisi, ulus paralara rakip olabilecek Bitcoin denilen çeşitli elektronik para uygulamaları ile birlikte aynı zamanda bir belgenin veya varlığın ispatlanmasında da kullanılmaya başlanmıştır. Kripto paraların ülkelerin rezerv para uygulamalarını ve ABD’nin Dolar Senyorajını bozacak potansiyelde olabileceği sunucuna varılmıştır. Ancak, Fereral Reserv Merkez Bankasının Dijital Dolar için gerekli alt yapıyı hazırlamış olduğuyla ilgili haberler dikkate alındığında Dolar kullanımının ve bundan kaynaklanan senyorajın devam ettirilme ihtimalinin de güçlü olduğu söylenebilir.

Investment portfolio Forex risk hedging in the international stock market

Subject. Investment management on the international financial market necessitates a special approach to foreign currency hedging. The majority of international investors fully eliminate risk associated with their foreign-exchange holdings, seeking profits only from stock price differentials. In certain circumstances, a correlation between local currency exchange rate and local stock index may provide additional opportunities for profit generation. Objectives. The aim of the study is to test the hypothesis that partial currency risk-taking may reduce the total portfolio risk and increase return on international investment. Methods. I apply the global optimization approach to calculate investment portfolios for 11 countries of the world. Each portfolio includes shares of 20–25 highly capitalized companies. Descriptive statistic methods are used to check the input data, i.e. random variable calculation, pivot tables. Investment strategy efficiency is assessed based on the Sharpe Ratio, Sortino Ratio, Treynor Ratio and Omega Ratio. Results. Currency hedge position at the rate of about 14 percent of the total portfolio value may increase investment yield by two percentage points annually on the ten-year time span. Conclusions and Relevance. Total currency risk hedge is necessary for investment in developed and developing countries that pursue the policy of regular devaluation of their national currency. Market regulators inside a particular country should take into account that a sudden devaluation of national currency may be needed, if return on the stock market is lower than that of risk-free instruments.

The Impact of Currency Devaluation on The Banking Sector of Azerbaijan

This master thesis aims to examine an empirical investigation of the impact of Azerbaijan national currency devaluation on the banking sector of Azerbaijan. We will identify how currency devaluation affects the performance of the banks in Azerbaijan. In recent decades, several developing countries have confronted volatility in national currency requiring major reforms in the financial sector and economy. Devaluation is considered a tool of central banks to regulate the national currency. The monetary authorities apply for devaluation in terms of enhancing the trade balance of countries. Macroeconomic equilibrium, price stability, financial and banking stability, sustainable economic growth, or sustained economic growth reflect the uppermost targets of monetary policy. On the other hand, this study will determine the profitability of banks in Azerbaijan and analyze the devaluation impact for 2013-2018 years. However, the price shifts of oil-gas resources in 2014 sketched the financial institutions severely in Azerbaijan. In this thesis, the modification of the dependent and independent variables of the regression model will be tested by using the Panel Data Analysis Method. Moreover, I decided to research this topic for my thesis, as my further plans are to continue my PhD degree and improve my career in this area. In this thesis, I will introduce a brief overview of the banking sector in Azerbaijan, and the effects of two devaluations by the Central Bank of Azerbaijan Republic in 2015. This thesis will check the effects of exchange rate fluctuations in Azerbaijan banking sphere by running balanced panel data for the period 2013-2018 years. The empirical findings of this study suggest that the changes in a foreign exchange rate have a statistically significant and adverse impact on the profitability of Azerbaijan banks.

The Impact of Public Debt on Economic Growth in Ukraine

<p><strong>Theoretical background:</strong> The growth in government borrowing, carried out in connection with the banks’ capitalisation, significantly increased the state budget expenditures aimed at servicing the capitalisation domestic public debt, which reinforces the general tendency regarding the exacerbation of the budget risk in the debt sphere in Ukraine. A weighty debt-creating factor was the budget deficit, which was covered by borrowing. Proceeding ahead of the rate of increase in debt volumes in comparison with gross domestic product (GDP) growth rates under the influence of internal and external destabilising factors contributed to the excess of the debt levels security indicators and increased the insolvency risk of the state. The increase of the obligations share denominated in foreign currency or linked to the exchange rate in the overall debt structure as an important indicator of the financial system’s vulnerability to exchange rate fluctuations creates additional threats to debt sustainability regarding the increasing currency risk and the national currency devaluation.</p><p><strong>Purpose of the article:</strong> The article is focused on studying the dynamics and structure of Ukraine’s public debt, its ratio to GDP, and an empirical analysis of the relationship between public debt (external and domestic) and economic growth in Ukraine.</p><p><strong>Research methods:</strong> To empirically test the relationship between public debt and economic growth in Ukraine over the 1992 to 2018 period, multiple regression models were conducted. A real GDP per capita was used as an indicator for economic growth and the debt-to-GDP ratio was used as an index of public debt. Research hypotheses were the following: H1: The public external debt-to-GDP ratio and GDP per capita have a strong negative and statistically relevant correlation; H2: The public domestic debt-to-GDP ratio and GDP per capita have a strong negative and statistically relevant correlation.</p><p><strong>Main findings:</strong> Examining the dynamics and structure of Ukraine’s public debt by borrowing market (external and domestic), it is concluded that there is no strong negative or positive statistically relevant correlation between the public debt-to-GDP ratio and GDP per capita for Ukraine. The impact of this factor is so insignificant that it encourages further research to verify that low GDP growth rate causes the increase in Ukraine’s public debt.</p>

Multiplier effect of factors influencing the inflation processes in Ukraine in 2014-2018

Inflation is a complex economic phenomenon in terms of form, development and consequences. Inflation undermines the possibilities of the economic regulation mechanism, nullifies the efforts to carry out structural changes and restore destroyed proportions. The aim of the article is to construct a regression model of the factors influencing the inflation processes in Ukraine and determine the multiplier effect of each factor on the resulting indicator. The object of the research is the inflation processes in Ukraine in 2014-2018. Mathematical modelling methods have been used in the base of the analysis. A correlation-regression analysis of inflation factors in Ukraine was conducted in the article. As a result of research, the presence of inflation of propositions (charges) in Ukraine is well-proven, that was conditioned in a greater degree by the increase of cost of commodities and services of natural monopolies, devaluation of national currency and increase in average salary. The value of inflation multipliers of these parameters and their functional influence on the cost-of-living-index have been determined. The dependence of the increase of the average salary is set on the change of the level of the minimum one has been determined. The most optimal directions of stimulant fiscal and monetary politics for the increase of the efficiency of government regulation of inflationary processes in Ukraine have been offered.

Affordable and equitable access to subsidised outpatient medicines? Analysis of co-payments under the Additional Drug Package in Kyrgyzstan

BackgroundOut-of-pocket (OOP) payments can constitute a major barrier for affordable and equitable access to essential medicines. Household surveys in Kyrgyzstan pointed to a perceived growth in OOP payments for outpatient medicines, including those covered by the benefits package scheme (the Additional Drug Package, ADP). The study aimed to explore the extent of co-payments for ADP-listed medicines and to explain the reasons for developments.MethodsA descriptive statistical analysis was performed on prices and volumes of prescribed ADP-listed medicines dispensed in pharmacies during 2013–2015 (1,041,777 prescriptions claimed, data provided by the Mandatory Health Insurance Fund). Additionally, data on the value and volume of imported medicines in 2013–2015 (obtained from the National Medicines Regulatory Agency) were analysed.ResultsIn 2013–2015, co-payments for medicines dispensed under the ADP grew, on average, by 22.8%. Co-payments for ADP-listed medicines amounted to around 50% of a reimbursed baseline price, but as pharmacy retail prices were not regulated, co-payments tended to be higher in practice. The increase in co-payments coincided with a reduction in the number of prescriptions dispensed (by 14%) and an increase in average amounts reimbursed per prescription in nearly all therapeutic groups (by 22%) in the study period. While the decrease in prescriptions suggests possible underuse, as patients might forego filling prescriptions due to financial restraints, the growth in average amounts reimbursed could be an indication of inefficiencies in public funding. Variation between the regions suggests regional inequity. Devaluation of the national currency was observed, and the value of imported medicines increased by nearly 20%, whereas volumes of imports remained at around the same level in 2013–2015. Thus, patients and public procurers had to pay more for the same amount of medicines.ConclusionsThe findings suggest an increase in pharmacy retail prices as the major driver for higher co-payments. The national currency devaluation contributed to the price increases, and the absence of medicine price regulation aggravated the effects of the depreciation. It is recommended that Kyrgyzstan should introduce medicine price regulation and exemptions for low-income people from co-payments to ensure a more affordable and equitable access to medicines.

Влияние девальвации национальной валюты на перерабатывающую промышленность Азербайджана

Влияние девальвации национальной валюты на перерабатывающую промышленность Азербайджана

Assessment of the Effects of Economic Sanctions on Iranians' Right to Health by Using Human Rights Impact Assessment Tool: A Systematic Review.

Background: Over the years, economic sanctions have contributed to violation of right to health in target countries. Iran has been under comprehensive unilateral economic sanctions by groups of countries (not United Nations [UN]) in recent years. They have been intensified from 2012 because of international community’s uncertainty about peaceful purpose of Iran’s nuclear program and inadequacy of trust-building actions of this country. This review aimed to identify the humanitarian effects of the sanctions on the right of Iranians to health and the obligations of Iran and international community about it. Methods: To assess economic sanction policies and identify violated rights and the obligations of states according to international human rights laws, in this study, Human Rights Impact Assessments (HRIA) tool is used. Applying this tool requires collection of evidences regarding the situation of rights. To provide such evidence, a systematic review of literature which involved 55 papers retrieved from the web-based databases and official webpages of Iran’s government and UN’ health and human rights committees and organizations was done. All articles about the consequences of economic sanctions related to nuclear activities of Iran on welfare and health of Iranians published from January 2012 till February 2017 in English and Persian languages were included. Search terms were economic sanctions, embargoes, Iran, welfare, health and medicine. Additional studies were identified by cross checking the reference lists of accessed articles. All selected papers were abstracted and entered into a matrix describing study design and findings, and categorized into a framework of themes reflecting the areas covered (health and its determinants). According to HRIA framework, related obligations of Iran and other states about adverse effects of the sanctions on Iranians’ right to health were extracted. Results: The sanctions on Iran caused a fall of country’s revenues, devaluation of national currency, and increase of inflation and unemployment. These all resulted in deterioration of people’s overall welfare and lowering their ability to access the necessities of a standard life such as nutritious food, healthcare and medicine. Also, the sanctions on banking, financial system and shipment led to scarcity of quality lifesaving medicines. The impacts of sanctions were more immense on the lives of the poor, patients, women and children. Humanitarian exemptions did not protect Iranians from the adverse effects of sanctions. Conclusion: Countries which imposed economic sanctions against Iran have violated Iranians’ right to health. International community should have predicted any probable humanitarian effects of sanctions and used any necessary means to prevent it. Furthermore, Iran should have used any essential means to protect people from the adverse effects of sanctions. Now, they should work on alleviation of the negative effects of sanctions. Even though, some of the effects such as disability and death cannot be compensated. In future, before imposition of sanctions, decisions makers should advice an international order to prevent such impacts on targeted countries’ populations.

Перспективы инвестиционного развития аграрного сектора Поволжья

They are analyzed dynamics and tendencies of development of production of main types of agricultural products (grain, meat, milk, vegetables), and also dynamics of production of whole-milk and sausage products, production of bakery products in the Russian Federation, Volga federal district and the Volga region. The characteristic of major factors of investment appeal of regions of the Volga region for private investments among which there is the state support is this, tendencies of the direction of capital investments and potential economic growth in agrarian and industrial complex are determining. Thanks to the government budget subsidies and devaluation of national currency, appeal of agrarian sector to large agroholdings and other groups of investors grows. At the same time the main directions of investment flows in agrarian and industrial complex of the Volga region – production of grain and vegetable growing on which industries the majority of regions of the Volga region specializes.

Paradigm of Currency Exchange Fluctuations and Foreign Trade Dynamics

This paper focuses on the currency rate changes and the impact of the currency fluctuations on trade flows. Through the empirical estimation of trade relations and exchange rate fluctuations, it is concluded, that the frequency of the foreign exchange fluctuations and the currency cycles were not reflected on Georgia-Turkey trade relations sufficiently. Trade flows were relatively dynamically. This case does not fully correspond to the widespread opinion according to which the exchange rate instability has a negative impact on trade relations, creates uncertainty and gives rise to the adverse effects of the expectations of business activity. Impact of the exchange rate fluctuations on the countries’ trade relations changes in the short and long term has different characteristics. Explanation of the export-import changes in short and medium term through the national currency exchange rate cycles does not show the correlation between them; and in the long-term – the national currency devaluation effect on dynamics of the trade relations was very slow. Foreign trade was sustainable, and the country’s national currency fluctuations did not have a significant role in the trade changes. Moreover, impact of the exchange rate on the ratio of export and import and national currency appreciation has not led to the deterioration of export conditions.

Factors of Growth of tax Revenues: A Macroeconomic Approach

Understanding the nature of key macroeconomic indicators and their behavior depending on the overall geo-economic background is decisive in the analysis and forecasting of tax revenues. This makes it necessary to conduct a detailed analysis of the factors determinig budget-forming tax revenues. The analysis of the tax revenues includes socio-economic, legal and tax administration factors. These factors have a differential impact on each budget-forming tax — profit tax, value added tax (VAT), mineral extraction tax (MET), personal income tax, excise taxes. The overall negative dynamics of revenues to the consolidated budget of the Russian Federation developed as a result of a serious reduction of MET, which confirms the strong resource dependence of the Russian economy. An ambiguous effect on the profit tax had the overall growth of the price level, the dynamics of industrial production and foreign trade and the ruble exchange rate. The increase in VAT revenues was achieved as a result of cumulative effects of inflation growth and increasing trade turnover in real terms. The decisive economic factor in the dynamics of such type of tax revenues as the excises is the consumer activity, but a major effect on its dynamics had a change in tax rates on excisable goods. Stable growth of tax revenues contributes to the Federal Tax Service of Russia measures aimed at combating the use of unfair methods of competition through the use of legislative gaps for tax evasion. FTS radically changed the approaches to the control procedures to reduce the interaction conflicts with taxpayers. In order to implement and improve the conciliation procedure FTS continues the development of the new mechanisms for pre-trial settlement of tax disputes, including tax monitoring. Changes of the price situation on the world markets, the weakening of external demand in key energy sources, the national currency devaluation is perceived by the tax authorities as the scenario conditions of the development of the economy, but the effective tax administration demonstrates the ability of budget to withstand financial and economic shocks

REGIONAL FOOD MARKET IN CRISIS PERIOD: ANALYSIS OF CONSUMER BEHAVIOUR

The research of regional food market in the light of changing consumer behaviour during the crisis is caused by the importance of food market as the main indicator: of trust to regional authorities and their ability to control and stabilize the main regional markets, perception and results of reforms, food security in the region. The decisions on the need for intervention in market processes, including food market, should be based on the research of consumer behavior: their advantages, preferences, reactions on changing prices, incomes, tastes, political and social factors etc. The aim of the article is to analyze consumer behaviour of population of the region in food market, to determine and systematize factors that affect it in the context of socio-economic specificity of parameters of food market development. The results of the first phase of the project Food basket of the resident of Chernivtsi city” which was initiated by the authors allow to make a conclusion which products Ukrainian people consume during the crisis and which ones don’t. The authors have collected the information about the structure and characteristics of food products consumption by residents of Chernivtsi and identified potential markers of disproportions in the system of food products supply to the markets of the city in order to avoid in future speculative price increase for basic foods and to create the foundations of food safety of Chernivtsi. Additional test investigation of the structure of household food basket of Chernivtsi has allowed the authors to gather and organize the information concerning the list of basic products which form food basket, to clarify the places of purchasing, their frequency in focus groups of consumers of different ages, family status, social status etc. It is established that restructuring of consumer basket of the population of Chernivtsi is affected by: inflation processes, caused in majority by national currency devaluation; panic moods, caused by military and political events at the East of Ukraine and the uncertainty of the residents of Chernivtsi of the presence of mechanisms for realization of food safety system and sometimes even the wish of central and regional authorities to discuss these issues at appropriate level, world prices fluctuation for grain, and, as a result, higher prices for basic groats and other. To prevent further price speculations regional authorities based on a constant monitoring should quickly apply trade interventions, instruments of state regulation and measures to stimulate regional producers and wholesale suppliers.

MAINTENANCE OF THE MONETARY SYSTEM STABILITY IN UZBEKISTAN

During the years of independence, the Republic of Uzbekistan has succeeded in building the modern monetary system. The national currency was introduced, monetary and currency markets have been developed along with the provision of independence of the Central Bank. However, the stability of national monetary system has not been ensured yet. In particular, the monetization level of the economy remains low, while the GDP deflator is rather high. In addition, high level of national currency devaluation is observed in recent years.Eventually all these urgent problems will negatively influence the stability of macroeconomic growth. The relatively high level of the GDP deflator (GDP deflator reflects a more realistic rate of inflation) has led to the significant growth of the money supply, which resulted in a strong devaluation of the national currency of Uzbekistan. For example, in 2012 the devaluation level of the national currency against the U.S. dollar was 10.5%. In addition, because of the low monetization coefficient, a crisis of defaulted payments among business entities has arisen.The author proposes to increase the volume of foreign currency swap and Gold Swap operation of the Central Bank of Uzbekistan in order to decrease the devaluation of the national currency. The author also suggests increasing the flexibility of monetary policy instruments such as an open market policy and reserve requirements to ensure the stable growth of the money supply.

To devalue or not to devalue?

If there is a negative terms of trade or financial shock leading to the deterioration in the balance of payments, there are two basic options for a country that has limited foreign exchange reserves. First, a country can maintain a fixed exchange rate (or even a currency board) and wait until the reduction of foreign exchange reserves leads to the reduction of money supply: this will drive domestic prices down and stimulate exports, raise interest rates and stimulate the inflow of capital, and finally will correct the balance of payments. Second, the country can allow the devaluation of national currency — flexible exchange rate will automatically bring the balance of payments back into the equilibrium. Because national prices are less flexible than exchange rates, the first type of adjustment is associated with the greater reduction of output.The empirical evidence on East European countries and other transition economies for the 1998–99 period (outflow of capital after the 1997 Asian and 1998 Russian currency crises and slowdown of output growth rates) suggests that the second type of policy response (devaluation) was associated with smaller loss of output than the first type (monetary contraction). The 2008–09 developments provide additional evidence for this hypothesis.

To Devaluate or Not to Devalue? How East European Countries Responded to the Outflow of Capital in 1997-99 and in 2008-09

If there is a negative terms of trade or financial shock leading to the deterioration in the balance of payments, there are two basic options for a country that has limited foreign exchange reserves. First, a country can maintain a fixed exchange rate (or even a currency board) and wait until the reduction of foreign exchange reserves leads to the reduction of money supply: this will drive domestic prices down and stimulate exports, raise interest rates and stimulate the inflow of capital, and finally will correct the balance of payments. Second, the country can allow the devaluation of national currency – flexible exchange rate will automatically bring the balance of payments back into the equilibrium. Because national prices are less flexible than exchange rates, the first type of adjustment is associated with the greater reduction of output.The empirical evidence on East European countries and other transition economies for 1998-99 period (outflow of capital after the 1997 Asian and 1998 Russian currency crises and slowdown of output growth rates) suggests that the second type of policy response (devaluation) was associated with smaller loss of output than the first type (monetary contraction). 2008-09 developments provide additional evidence for this hypothesis.