National Bank Of Ukraine Research Articles

DIGITALIZATION OF RISK-ORIENTED MANAGEMENT OF FINANCIAL AND ECONOMIC SECURITY OF THE BANK

The scientific results of the study are to determine the current trends of digitalization of risk-oriented management of banking activities to justify the directions of increasing the level of financial and economic security of Ukrainian banks in the context of the Russian-Ukrainian war and considering the needs of economic recovery. The expediency of using indicators of financial stability, which are published by the National Bank of Ukraine under martial law, has been proven, namely: the capital of the first level to the assets weighted by risk; the ratio of the capital of the first level to assets; non-performing loans excluding provisions for capital; non-performing loans to aggregate gross loans; rate of return on assets; net open position in foreign currency to capital. It is determined that modern banks introduce innovative digital solutions aimed at risk-oriented management of financial and economic security in a continuous real-time mode. Some procedures are performed automatically, and it is possible to use artificial intelligence programs, but these innovations must be managed carefully because we are talking about the financial security of millions of bank customers and the financial and economic security of banks, as well as the financial stability of the banking system of Ukraine. It has been substantiated that prospects for further research should be developed in the areas of economic recovery in Ukraine, by strengthening the banking system and developing digitalization of risk-based management of financial and economic security of banks using best practices and international experience. For a more objective assessment of the level of financial and economic security of Ukrainian banks, it is advisable to apply economic standards, regarding banking risks, indicators of financial stability, and the financial stress index, which together reflect the bank’s propensity for force majeure in the financial system, the ability to resist and adapt to adverse changes, and various economic challenges.

Перспектива повернення України до режиму таргетування інфляції: визначення рівня оптимальних валютних інтервенцій

The article contains a comprehensive analysis of the path of Ukraine’s monetary policy, focusing on the potential for returning to the inflation targeting regime in terms of the level of foreign exchange interventions. The purpose of the study is to convey the critical importance of FX interventions in Ukraine’s monetary policy and to determine the required maximum level at which the National Bank of Ukraine (NBU) will be able to return to the inflation targeting regime. The pre-war period, during which the NBU switched to the inflation targeting regime, which replaced the exchange rate targeting regime, is considered. The article discusses the transitional stage, describes in detail the obstacles faced by the NBU in achieving inflation targets. These challenges included internal factors such as structural weaknesses in the economy, external shocks, and the overall impact of economic trends. The transition to the inflation targeting regime was marked by periods of uncertainty that required the NBU to adapt its actions to ensure the efficiency of monetary policy. The implemented reforms helped to reduce inflation and stabilized the economy in general. At that time, the inflation targeting regime proved to be really effective and the one to which the NBU should return in the future. After the start of the full-scale war unleashed by the russian federation, the central bank was forced to return to exchange rate control. This change was driven by the urgent need to maintain economic stability in the face of the daily shocks of war. The article highlights the reasons for the transition to fixing the exchange rate, outlines the consequences for the economic trajectory of Ukraine and indicates the reasons that record the impossibility of implementing this regime in the long term due to the depletion of reserves and the creation of non-market conditions that will not reflect the real economic situation in the country. A key component of the study is the analysis of foreign exchange interventions, which play a crucial role in stabilizing the economy. Studying various indicators and levels of foreign exchange interventions, the article identifies the optimal level of interventions necessary for Ukraine. This analysis is based on central bank statistics and theoretical principles, providing a solid basis for determining the conditions under which Ukraine can successfully return to inflation targeting. The article concludes that a return to inflation targeting is not only desirable, but also vital, provided that the NBU is able to maintain the optimal level of FX interventions identified in the study.

POLICY ON LONG-TERM REFINANCING OF COMMERCIAL BANKS

Introduction. Safe functioning of the commercial banks (CB) is mainly impacted by the justified, effective and clear policy of the central banks on refinancing of the commercial banks. While current refinancing supports current liquidity of the commercial banks and their ability to meet the economic standards, the long-term refinancing supports the macroeconomic and financial stability in the country and the development of the instruments of the investment refinancing of the central bank, the increase of the volume of the loans provided by the CB to the real sector of the economy and its structural reconstruction, supports export oriented industries and small and medium business, cooperation with the governments on refinancing of the important investment projects, and the increase of the financial mediation institute effectiveness. The purpose of the article is to determine the substance, types, factors and the features of the realization of the policy on long-term refinancing of the commercial banks by National Bank of Ukraine (NBU). Results. The substance of the long-term refinancing policy of the commercial banks, its types, stages and problems of development as well as the potential ways of its optimal realization are highlighted. Conclusions. The development of the justified policy on long-term refinancing of the commercial banks by NBU and ensuring of the effectiveness of its realization can be done by the optimal execution by the regulator of the role of the last instance creditor. Referring to the above the considered provisions and recommendations need in-depth research.

Інноваційні технології у фінансовій сфері: узагальнення світового досвіду

The introduction of innovations makes it possible to ensure a stable economic situation for the business entity – both at the level of the national financial sector and in the international financial services market. The spread of financial technologies in the world continues to evolve through the emergence of new products and services. Despite different approaches to the development of enterprises and organizations in the financial sector, the common features remain the desire for innovation, ensuring the security of the financial system and protecting consumers. The contemporary tendency towards the introduction of flexible models of response to changes in the economic environment is one of the major strategies for creating favorable conditions for the development of innovative technologies in the financial sector. The aim of the publication consists in a theoretical generalization of the international experience in the implementation of financial innovations and to develop recommendations for its implementation in domestic practice. Financial innovation technologies are an important component of the development of the national economy of Ukraine. Our country has significant potential for the development of financial technologies, but its regulatory framework still needs significant changes to create a favorable environment for innovation. Unlike the UK or the EU, where regulations are aimed at accelerating the introduction of financial technologies, in Ukraine this process is just beginning. The article analyzes the international experience in the introduction of innovative technologies in the financial sector. The experience of fintech innovations in the USA, Great Britain, China, Singapore, South Korea is considered, the features of implementation and the possibility of their adaptation to activities of the business entities in Ukraine are determined. The existing regulatory obstacles to the possibilities of generation of fintech startups in Ukraine are identified. The National Bank of Ukraine (NBU), which is the key regulator of the national financial sector, is gradually introducing new rules and conditions for the development of financial technologies. However, at present, the limited legal framework for cryptocurrencies, blockchain technologies and other innovative solutions remains a problem, which hinders the development of such instruments. An analysis of the experience of implementing innovative technologies in the leading countries of the world proves that Ukraine already has a fairly flexible regulatory system, which creates potential advantages for the generation of financial startups, but at the same time there are certain risks of an imperfect regulatory system.

ДИСКУСІЙНІ АСПЕКТИ АУДИТУ ІНШОЇ ІНФОРМАЦІЇ

The article investigates the problematic aspects of determining other information (financial and non-financial) that requires the auditor's attention. The authors consider the issues of the content of the Management Report on the example of trade enterprises; requirements for the auditor to obtain other information and the content of the relevant audit procedures at each step, which are necessary in case of obtaining other information after date of the auditor’s report; additional requirements of regulators for business entities regulated and supervised by the National Bank of Ukraine and the National Securities and Stock Market Commission, and audit firms; audit documentation of other information. Based on the results of the study, it was determined that there is a need to establish a minimum list of indicators by financial performance areas to be disclosed in the Management Report at the legislative level, which will provide for a comparative analysis of enterprises by industry and facilitate the unification of audit documentation. In order to improve the process of audit documentation, it is recommended to use the documents by audit stage, in particular, "Audit of Other Information – Audit Programme" (planning stage); "Inquiry for Other Information", "Verification of compliance of Management Report and financial statement", "Verification of compliance and consistency of annual information of the issuer of securities and financial statement" (testing stage); "Checklist – Analysis of the Auditor’s Report for Compliance with Article 14 of the Law of Ukraine No.2258-VIII", "Checklist – Analysis of the Auditor’s Report for Compliance with ISA 720", "Checklist – Compliance with the Requirements for the Auditor’s Report to the NSSMC" or "Checklist – Compliance with the Requirements for the Auditor’s Report to the NBU" (reporting stage). This approach will make it possible to organise the results of other information review by the main stages of the audit. Areas for further research may be related to the development of proposals for streamlining the content of other information.

Functioning of banks with foreign capital in the context of ensuring the financial security of Ukraine

The article examines modern features of the functioning of banks with foreign capital from the point of view of ensuring the financial security of Ukraine. It was established that banks with foreign capital play an important role in the development of the country's financial sector: in 2019–2023, they formed more than a quarter of the volume of net assets, liabilities and net profit of the domestic banking system. At the same time, according to the results of the analysis of the trends of changes in the specific indicators of infrastructure, net assets, liabilities and profit, a reduction in the presence of banks with foreign capital in the Ukrainian financial market was recorded due to the worsening of the geopolitical situation in the country. The declining nature of the rate of growth of lending by banks with foreign capital to individuals and legal entities was noted. At the same time, it was emphasized that the less rapid fall in the volume of lending to business entities compared to lending to individuals is due to several stimulating measures by the Government and the National Bank of Ukraine regarding the more active participation of banks in lending programs of the real sector of the economy. The change of priorities in the activity of banks with foreign capital towards the investment direction is also noted. Based on the analysis of the dynamics of the share of foreign capital in the authorized capital of Ukrainian banks, it was revealed that the level of concentration of foreign banking capital in the national financial system has decreased by almost four times. Conclusions were made about the probability of additional financial risk and the threat of deterioration of the economic situation in the country due to the reduction of access channels to foreign investments. In this regard, it is proposed to increase the competitiveness of domestic banks by actively implementing the principles of sustainable development. It is emphasized that for the implementation of ESG approaches, there is a need to improve the organizational culture of banks, to establish effective interaction with society and state authorities. It is noted that the high positions in the ratings of banks with foreign capital confirm the possibility of forming a positive reputational impact based on the effective management of ESG risks of banking activity, which contributes to increasing the volume of assets and profits of banks.

ПЕРСПЕКТИВИ РОЗВИТКУ FINTECH В УКРАЇНІ ТА СВІТІ У 2024 РОЦІ

The main trends in the development of FinTech in Ukraine and the in world in 2024 are analyzed in the article. Three areas in the FinTech development are currently identified as the most relevant: use of artificial intelligence, the latest technologies, and changes in financial services. Each area is analyzed and characterized in terms of content and development prospects. The impact of the regulator, the National Bank of Ukraine, on the activity of FinTech companies is considered separately. Plans to attract investments by Ukrainian FinTech companies in 2024 are analyzed: 45% of companies plan to develop by their own expense, and 39% plan to attract private investors’ resources. Plans for Ukrainian FinTech companies to enter the international market this year were analyzed: almost half of Ukrainian FinTech companies (47%) are already operating in international markets, and 38% plan to enter in the future. The analysis of the dynamics of the global artificial intelligence market in 2021-2023 and its forecast until 2030 shows that in 2023 the global artificial intelligence market was evaluated at about USD 200 billion. According to the Statistics Portal, this market is expected to grow significantly to almost $2 trillion by 2030. Based on the analysis of literature sources, it has been determined that new technologies that become popular in the FinTech sector will be: open banking, e-wallets, digital currencies, etc. To support their systemic development, it is necessary to use digital technologies. Thus, the article identifies promising areas of artificial intelligance use in the process of FinTech development in banking institutions: automated trading and investments (in the short term, investors will be able to focus on the development and implementation of specific strategies by outsourcing trading technologies to artificial intelligence), customer support system (text, voice, and video chatbots will be improved through integration with ChatGPT), fraud protection (automatic analysis of large amounts of data to identify potentially dangerous transactions will take much less time than manual analysis).

СУЧАСНІ ПЕРЕДУМОВИ ЗОВНІШНЬОЇ ТРУДОВОЇ МІГРАЦІЇ УКРАЇНЦІВ

The article examines the modern prerequisites of foreign labor migration, analyzes the main factors and the impact on donor countries and recipient countries. Economic, social and political prerequisites are proposed among the main aspects that are considered, which encourage Ukrainians to go abroad with pension provision. The directions of the choice of recipient countries by Ukrainian labor migrants before the Great War and during the period of military aggression were analyzed. The article examines the influence of global economic trends on migration flows, considering the level of wages in Ukraine and the country of migration of Ukrainian labor migrants, the main economic indicators that affect external labor migration, among them are the high level of unemployment and inflation, and the low level of wages. The social prerequisites contributing to the growth of labor migration activity have been identified. Social prerequisites interact with economic, political and other aspects, forming the motive for external labor migration. All the prerequisites created in the study positively and negatively affect the economic and social condition of the donor country and the recipient country. The political situation in Ukraine, in particular conflicts and unrest, is also considered as one of the important factors influencing the decision of citizens to emigrate. The modern prerequisites of the international migration of Ukrainians are a relevant topic in the conditions of globalization and changes in the political, economic and socio-cultural environment. The research is aimed at analyzing the factors affecting the mass migration of Ukrainians abroad. Considering these factors, it is important to develop comprehensive strategies and policies aimed at improving the economic situation in Ukraine, maintaining stability and developing society. Attention should also be focused on the conditions created for the integration and adaptation of migrants to ensure mutually beneficial and harmonious relations in the international community. The article is relevant and important in the context of the modern world, where external labor migration is an extremely large challenge and opportunity for the country.Keywords. external labour migration, prerequisites for migration, labour migrants, remuneration, employment, economic instability, National Bank of Ukraine.

ПРОБЛЕМИ КООРДИНАЦІЇ МОНЕТАРНОЇ ТА БЮДЖЕТНОЇ ПОЛІТИКИ В СУЧАСНИХ УМОВАХ

The escalation of economic and political instability necessitates that governments and central banks seek determines the need to find new approaches to ensure the stability of the functioning of financial markets and public finances, as well as to support economic growth in the context of the implementation of their economic, financial and monetary strategies. Addressing these challenges involves enhancing the coordination of monetary and fiscal policies through the utilization of both formal institutions and informal practices, given the considerable need for updating traditional approaches proposed by economic theory. Based on the theoretical analysis of existing scientific concepts and approaches, this study discerns the principal trends in establishing methodological frameworks for orchestrating the interaction between monetary and fiscal authorities in formulating and implementing monetary and fiscal policies. By means of a comparative analysis of the activities of central banks and governments of the leading countries of the world and domestic practice, the interrelationships between monetary and fiscal policy have been determined and characterized, the main institutional, operational and instrumental factors that restrain the processes of effective interaction of monetary and fiscal authorities have been identified. Empirical analysis reveals that central banks in most countries exhibit a high degree of operational and managerial independence, although disparities in political and financial autonomy are apparent, potentially engendering contradictions in the collaboration between monetary and fiscal authorities. It is substantiated that successful coordination of monetary and fiscal policies necessitates the presence and efficient functioning of formal institutions in conjunction with the utilization of informal practices that complement and reinforce each other. The need to clarify the institutional foundations, functions and spheres of interaction of fiscal and monetary authorities, taking into account the features of the modern stage of economic development, is substantiated. The key principles are defined, the main goals are formulated and the objects of coordination are characterized. A system of measures is proposed that should contribute to the improvement of monetary and fiscal policy coordination processes by strengthening formal and informal cooperation of authorities. The practical implementation of the developed approaches and recommendations will enhance the effectiveness of the collaboration between the government and the National Bank of Ukraine in coordinating monetary and fiscal policies to ensure financial stability and promote economic and social development.

ШЛЯХИ ВИРІШЕННЯ ЛОГІСТИЧНИХ ПРОБЛЕМ ПРИЧОРНОМОРСЬКОГО РЕГІОНУ УКРАЇНИ НА ТЛІ РОСІЙСЬКОЇ БЛОКАДИ ЧОРНОМОРСЬКИХ ПОРТІВ

The article is devoted to the analysis of logistical problems caused for Ukraine and the world by the Russian blockade of the Black Sea and sea routes of the Black Sea region. The author describes in detail the negative consequences of the blockade (a sharp reduction in the export of Ukrainian grain, an increase in world food prices, the threat of a food crisis in the countries of Africa and Asia, economic losses for Ukraine), explores ways to solve this problem, for example, the organization of one's own grain corridor with the help of increasing military presence in certain parts of the Black Sea, as well as the use of alternative ways of transporting products through river ports, railways and roads, compares the economic feasibility and general capabilities of Ukraine and its allies in providing cargo transportation, calculates the total effect of simultaneous use as the Ukrainian "grain corridor" itself, as well as a set of possible alternative modes of transportation. The article reveals the main problems of using alternative methods of transportation of export products of Ukraine, as well as possible ways to solve these problems. The author emphasizes the significant economic losses that Ukraine received from the blockade of the Black Sea by the Russians, primarily because the export of food from our country is a rather important source of filling the state treasury with foreign currency, which makes it possible to restrain possible, large inflation in wartime conditions, and to reduce currency interventions by the National Bank of Ukraine. The author also describes in detail the military maneuvers used by the representatives of the armed forces of Ukraine to reduce the presence of the Black Sea Fleet of the Russian Federation in the western part of the water area, such as: the sinking of the cruiser "Moskva", the return to the world of control of gas and oil production facilities, as well as the liberation of the island "Zmiiny". It was emphasized that the illegal Russian blockade of the Black Sea is a serious challenge for Ukraine and the world. Overcoming it will require joint efforts and coordination of actions at the international level.

РЕГУЛЮВАННЯ БАНКІВСЬКОЇ ДІЯЛЬНОСТІ В УКРАЇНІ У КРИЗОВІ ПЕРІОДИ

In a market economy, banks have extremely large opportunities to influence economic processes, which necessitates the regulation of their activities. The need to regulate banking activities is especially acute during the period of crisis in the country's economy, as banking activities are characterized by a much larger set of risks, which leads to its increased financial vulnerability. The modern banking system of Ukraine has been operating in a full-scale war for more than two years, which increases the number of risks and threats to the banking sector in particular and the Ukrainian economy as a whole. An effective banking regulation system is key to the normal and stable functioning of the banking system in such conditions, as well as to a rapid post-war recovery. Despite the considerable number of works devoted to the study of various aspects of banking regulation in Ukraine in the context of the financial crisis, it should be noted that the new realities and challenges within which the banking system operates today necessitate further comprehensive research of approaches to regulating banking activities in times of crisis in the domestic financial market. The purpose of the article is to clarify the practical features of banking regulation in Ukraine in times of crisis, and also to identify the key areas for its improvement in the context of significant uncertainty and volatility of the environment. The article defines the purpose and role of banking regulation in Ukraine in times of crisis. The legal framework regulating the activities of banks is studied. The key changes made to the regulatory framework by the National Bank of Ukraine during the crisis period are characterized. Practical approaches to the regulation of banking activities in Ukraine are characterized based on the analysis of the main indicators characterizing the state of development of the banking sector in the context of crisis turning points in the history of the formation of our country, namely: during the global financial crisis of 2008–2009, the local financial crisis of 2014–2016, the economic crisis of 2020–2021 and the current crisis conditions. The article also identifies the peculiarities of banking regulation in Ukraine in times of crisis. It is emphasized that the functioning of the Deposit Guarantee Fund in Ukraine has a significant impact on the stability of the financial system due to its ability to neutralize shocks and/ or consequences of crises by preventing panic of depositors and rapid withdrawal of insolvent financial institutions from the market. The key directions for improving the regulation of banking activities in the current conditions of high uncertainty are substantiated.

Substantiation of the marketing policy of banks on the basis of statistical analysis of the payment card market

Substantiation of the marketing policy of banks on the basis of statistical analysis of the payment card market

Electronic money in Ukraine:features and accounting with consideration of the factor of war

The main trends of electronic money development are investigated in the article, in particular the basic changes in the number of electronic wallets, the volume of transactions with electronic money in the conditions of martial law. The main advantages of using electronic payments by users are highlighted and the reasons for increasing trends of using electronic money are listed. It is convenience thanks to simple functionality, ease of use on the Internet, reduction of cash in circulation, ensuring control of cash flows and creation of payment infrastructure. As a result of the concept of «electronic money» it is revealed that electronic money can be considered as a means of payment, but they cannot be equated to hryvnia. The main restrictions on electronic money payments for the month and calendar year are described. The article outlines the steps you need to take to replenish your electronic purse or withdraw funds. Identified 23 banks which can issue electronic money and payment systems was indicate that banks use: Mastercard, Visa, Space, Maxi, Globalmoney, Forpost, Alfa-money, Electrum, Xpay. Highlight a smart card or other media containing the chip, which allows people to make payments at POS terminals using NFC contactless payment technology. A Pilot Project for the Issue of E-Hryvnia Based on the Blockchain System is analyzed, provided that only the National Bank of Ukraine is the issuer of the e-Hryvnia. In terms of accounting, the account 33 «Other means» is assigned to display electronic money, however in cases of purchase of goods by card, the account 37 «Settlements with different debtors» is used. The article deals with the disadvantages of displaying electronic money in these accounts. Further prospects and future challenges in using electronic payments and accounting is estimated.

The impact of the war on banking in Ukraine

The article is devoted to the study of the operation of the banking system of Ukraine during the war period. The key indicators of the banking sector have been analyzed, in particular, the number of banking institutions and the dynamics of assets and liabilities. The key financial results of the banking sector, namely net profit and loss, return on assets and capital have been analyzed. It is revealed that maintenance of operational efficiency and effective measures taken by the National Bank of Ukraine allowed the banking sector to adapt to the crisis conditions and make a profit under martial law.

Currency calculations during the war

Introduction. The introduction explores the impact of war on foreign economic activity and currency transactions in Ukraine. It examines how the war influences the Ukrainian economy, emphasizing the importance for businesses to be aware of changes in currency transactions during times of war. The purpose of the paper is to analyze restrictions on currency transactions during the state of war in Ukraine and potential penalty sanctions for violations of currency legislation. Results. Currency transactions in Ukraine during the war impact a significant sector of the economy and the lives of the country's citizens. To ensure financial stability, the National Bank of Ukraine and the government have implemented a series of measures, creating challenges for businesses and the population. These measures include changes in the currency exchange rate, restrictions on the issuance of foreign currency, and limitations on cross-border transfers, and others/ Conclusions. During the period of martial law, currency transactions have faced significant challenges and changes. The National Bank of Ukraine and the government have implemented and continue to implement a series of measures to ensure stability in the currency market and mitigate the negative impact of the war on Ukraine's financial system. To minimize the adverse effects, restrictions on cash withdrawals, issuance of funds in foreign currency, cross-border currency transfers, and more have been introduced. Equally important, all economic ties with the aggressor country have been halted. Over the years of war, it has become clear that control over currency transactions plays a crucial role in ensuring economic stability. In turn, businesses need to monitor all these changes implemented by the country's leadership to continue developing successfully and contribute to the growth of our country's economy.

Can central bank digital currencies help advance financial inclusion?

Central banks around the world are considering how retail central bank digital currencies (CBDCs) may help to advance financial inclusion. While CBDCs are not a magic bullet, they could be a further tool to promote universal access to payments and other financial services if this goal features prominently in the design from the get-go. In particular, central banks can consider design options to: (1) promote innovation in the two-tiered financial system (eg allowing for non-bank payment service providers); (2) offer a robust and low-cost public sector technological basis (with novel interfaces and offline payments); (3) facilitate enrolment (via simplified due diligence and electronic know-your-customer processes) and data portability; and (4) foster interoperability (both domestically and across borders). Together, these features can address a range of specific barriers to financial inclusion: geographic remoteness, institutional and regulatory factors, economic and market structure issues, characteristics of vulnerability, lack of financial literacy and low trust in existing financial institutions. This paper draws on interviews with nine central banks with advanced work on CBDCs and financial inclusion — the Central Bank of the Bahamas, Bank of Canada, People’s Bank of China, Eastern Caribbean Central Bank, Bank of Ghana, Central Bank of Malaysia, Bangko Sentral ng Pilipinas, National Bank of Ukraine and Central Bank of Uruguay. It gives concrete examples from the central banks’ work and discusses challenges, risks and regulatory and legal implications. It argues that while CBDCs hold promise for furthering financial inclusion, CBDC issuance may also require new laws and regulations to be enacted, or existing laws to be revised.

Overview of the foreign exchange market of Ukraine in the conditions of martial law

The paper examines the peculiarities of the functioning of the currency market of Ukraine in the conditions of martial law and takes into account the aspect of economic and political components. The data of the study of the currency market of Ukraine during the war period are presented and their content is analyzed. The causes and factors influencing the formation and activity of the foreign exchange market are identified, and proposals are given for carrying out stabilization measures and minimizing currency risks in conditions of stress and uncertainty caused by the war. The main elements of the NBU's regulatory easing policy on the currency market of Ukraine in wartime conditions are outlined. One of the first steps taken by the National Bank of Ukraine in times of macroeconomic and military-political instability were the measures of strict currency regulation aimed at minimizing currency risks. In order to maintain financial stability, the NBU had to introduce strict currency restrictions and fix the exchange rate of the hryvnia to the US dollar. Such administrative intervention helped to balance the foreign exchange market in conditions where it would have been impossible to do so by market methods. The temporary fixation of the exchange rate, strict restrictions on currency transactions, restrictions on withdrawals from currency accounts and other measures became a reliable basis for stabilizing both the currency market and the financial system of Ukraine. Of course, administrative restrictions smooth out temporary distortions in the foreign exchange market, but over time they can lead to the accumulation of imbalances, since the market mechanism of balancing the demand and supply of currency in search of exchange rate equilibrium ceases to operate, which sooner or later can lead to or to sudden major crises, or to endless stagnation. Therefore, long-term regulation of the foreign exchange market by strict administrative measures can have negative consequences. This prompted the NBU, in accordance with the new strategy of gradually abandoning the fixed exchange rate of the hryvnia, to switch to the strategy of easing currency restrictions and returning to flexible exchange rate formation and targeting. This strategy is one of the structural beacons of the memorandum with the IMF, which will determine the sequence of steps to liberalize currency restrictions and return to a more flexible exchange rate regime. If such mitigations are not made even in the conditions of a brutal war, the consequences for the country's financial system and the functioning of business can be negative.

ПРОЦЕНТНА ПОЛІТИКА НАЦІОНАЛЬНОГО БАНКУ УКРАЇНИ ТА ЇЇ ВПЛИВ НА ЕКОНОМІКУ КРАЇНИ

An analysis of the interest rate policy of the National Bank of Ukraine implemented in the last decade is carried out, and its impact on Ukrainian economy is determined. It is concluded that approaches to interest rate policy that prove effective in one macroeconomic environment may have unintended consequences in another. It is determined that modern monetary and credit policy of the world’s leading countries, in contrast to domestic practice, is characterized by negative interest rate policy, which was introduced by central banks of many countries after the 2008 crisis for the deposits of commercial banks they attracted. It is substantiated that with the adoption of the Law of Ukraine "On the National Bank of Ukraine" in 2010, a gradual transformation of the regulator's policy began, which manifested, in particular, in shift of emphasis from exchange rate stability policy to price stabilization policy. Since then, the interest rate policy has been used exclusively as a tool for anti-inflation regulation, which in the conditions of macroeconomic environment instability and systemic shortcomings of the domestic economy proved ineffective. It is proven that with a systemic surplus of liquidity in the banking sector of Ukraine, tying the value of all monetary resources on the financial market to the NBU discount rate led to a rise in the rate on its deposit certificates and a significant increase in its mobilization operations. Significant volumes of the NBU mobilization operations and high rates for them caused the loss of incentives for the banking sector to lend to non-financial corporations and excessive expenses in government borrowing. Attention is focused on the fact that the current detachment of the banking sector from the needs of the economy may become a restraining factor in wartime and during post-war recovery of the country.

Can central banks be heard over the sound of gunfire?

AbstractIn this study, we examined the effectiveness of central bank communications during times of significant adverse shocks. Specifically, we examined how the National Bank of Ukraine (NBU) regulated foreign exchange (FX) markets during the Russo‐Ukrainian War in 2022. Data collected from both the black and authorized FX markets suggested that the content of the NBU's announcements significantly impacted FX market agents. Announcements aimed at maintaining a fixed (floating) FX rate prompted an increase (decrease) in the black market premium in cash transactions. Moreover, the NBU's announcements influenced the sale side of foreign currency more than any other aspect, an area where the black market FX traders held near monopolistic power.

The impact of monetary policy during the legal regime of martial law on the Ukrainian labor market

The purpose of this research is to conduct an in-depth analysis of the monetary policy influence during the period of martial law on the state of the labor market and welfare of the population in Ukraine. The article examines the effects of military actions on the workforce, employment sectors, and briefly outlines the key actions taken by the National Bank of Ukraine (NBU) to stabilize the macroeconomic situation in the country, mitigate inflationary pressure, and counter capital outflows.Based on available statistical data and expert assessments of the labor market in Ukraine following the full-scale invasion, the effectiveness of monetary mechanisms, including the temporary shift from inflation targeting to exchange rate fixing, was analyzed. The conducted analysis confirmed that despite timely adaptive changes in monetary policy by the regulator, the effectiveness of the monetary transmission mechanism during wartime remains low. The decline in real production, reduced confidence in the national currency, and the initiation of government spending financed through monetary emission resulted in an excess liquidity situation in the economy, leading to diminished effectiveness of the monetary transmission mechanism. As a result, controlling inflation levels and inflation expectations during the period of martial law cannot be fully ensured by the National Bank of Ukraine.Moreover, the analysis of forced emigration dynamics during the Russian invasion also revealed that high uncertainty levels deter refugees from returning to Ukraine and incentivize them to spend earned income in host countries. Despite the unprecedented wave of emigration, the increase in private remittances from abroad remains marginal. Thus, a priority task for the government should be to develop strategies of financial and social incentives to encourage the return of the working population and facilitate Ukraine’s post-war reconstruction.
 JEL classіfіcatіon: E58, F24, G28, J21