Unstable Exchange Research Articles

Approaches in the monetary policy of the National bank of Ukraine to curb inflation and prevent rapid devaluation of the Hryvnia in wartime conditions

Introduction. Monetary policy serves as a fundamental component of the economic strategy of the National Bank of Ukraine (NBU), focused on ensuring price stability and fostering an environment conducive to economic growth, development, and increased employment levels within the country. Following the onset of large-scale military occupation in Ukraine, which inflicted significant damages on the national economy and disrupted international trade, the NBU has been compelled to take decisive actions. These measures aim to minimize the severe impacts of military operations on Ukraine’s banking and monetary systems and address multiple emerging challenges. The purpose of this paper is to explore the approaches of the NBU's monetary policy aimed at curbing inflation and preventing the rapid devaluation of the hryvnia during wartime conditions. Results. The strategy pursued by the NBU is directed towards securing both price and financial stability, which are essential for macroeconomic stability. The current state of Ukraine’s monetary policy reveals several institutional challenges, including unstable exchange rates, hryvnia devaluation, an expansion of the shadow economy, and a high volume of currency transactions within the country. During the conflict, the monetary and credit policies of the NBU prioritize fulfilling Ukraine’s defense needs, ensuring the functionality of financial markets, maintaining the smooth operation of banking and payment systems, controlling inflation, stabilizing the hryvnia, and safeguarding necessary levels of international reserves. Conclusions. A key mechanism for the NBU’s influence on inflation in Ukraine is the primary interest rate, which determines the rate at which the NBU provides funds to financial institutions. This key rate significantly impacts the interest rates commercial banks offer to individuals and enterprises, which in turn affects the inflation level.

Creation of Ponitec Allied Limited for Manufacturing of Palm Fruit Products and By-Products

Ponitec Allied Limited is a startup business venture established in 2015 with core in Agriculture. It produces Crude Palm Oil (CPO), Palk Kernel Oil (PKO) including other associated by-products of Palm trees. One of its competitive advantage across the industry centers on manufacturing hygienic high quality products and the Activated Carbon Charcoal. The company operates in line with global standard through the use of latest machines, hygienic processing environment, cutting edge storage facilities and proper fruits handling. With ownership of about 136 hectares of land for plantation with 10 tonne factory, it has the capacity to produce 10 tonne of product per day. Some of its major customers cut across food refining companies, non-food industries plus wholesalers and retailers. The company competes with big players like; Okomu and Presco, Dufil Prima, Ibiae Oil Palm amongst others. Business revenue projection for a period of five years showed ₦186,212,500 in first year, ₦ 223,455.000 in second year; ₦246,249,500 for the third year; ₦ 420,651,000 in fourth year and ₦ 523,711,000 in the fifth year. The risk predominant with the business beckon on factors as; unstable exchange rate, theft, pest outbreak and reputational risk of quality.

CRYPTOCURRENCY PRICE PREDICTION: A HYBRID LONG SHORT-TERM MEMORY MODEL WITH GENERALIZED AUTOREGRESSIVE CONDITIONAL HETEROSCEDASTICITY

Cryptocurrency is a virtual payment instrument currently popular as an investment alternative. One type of cryptocurrency widely used as an investment is Bitcoin due to its high-profit potential and risk due to unstable exchange rate fluctuations. This high exchange rate fluctuation makes trading transactions in the crypto market speculative and highly volatile. To overcome this volatility factor, this research used the Generalized Autoregressive Conditional Heteroscedasticity forecasting method to describe the heteroscedasticity factor, as well as a Recurrent Neural Network (RNN) with long-short-term memory that has feedback in modeling sequential data for time series analysis. The two methods are combined to overcome the dependency of time series data in the long term and the heteroscedastic effect of the volatility of price changes. The results of the GARCH-LSTM hybrid model in this study show a Mean Absolute Percentage Error (MAPE) value of 15.69%. The accuracy value is obtained from the division of training data by 80% and testing data by 20%, with the number of neurons as many as three and epochs of 100 using the Adam optimizer. The MAPE accuracy results show a good prediction in predicting the value.

Leverage, Firm Size, Likuiditas, Financial Distress, dan Aktivitas Hedging Dengan Instrumen Derivatif

This research aims to determine the effect of leverage, firm size, liquidity and financial distress on hedging activities in textile and garment subsector companies listed on the Indonesia Stock Exchange due to unstable exchange rate changes. The sample method used is purposive sampling with 65 observations collected during the 2017-2021 period. The secondary data used is obtained from the company's financial reports available on the website of the Indonesia Stock Exchange (IDX) and other sources. Data analysis was performed using logistic regression method. The findings of this research show that leverage does not have a significant influence on hedging activities, while firm size and financial distress have a positive influence on hedging activities, and liquidity has a negative influence on hedging activities.
 Keywords: Leverage; Firm Size; Liquidity; Financial Distress; Hedging Activities

IMPACT FACTORS ON TIME AND COST IN PILE CONSTRUCTION

Construction activities have increased due to Saudi Arabia's Vision 2030 programs, accelerating change across all sectors. However, the pile construction sector has already experienced significant time and expense overruns that have had a negative impact on all parties. This study aims to identify and investigate the significant risk influencing the timing and cost of pile construction projects in Saudi Arabia. The most risks were gathered and found in the literature. Two questionnaire-based surveys were undertaken to establish the perspectives of the construction experts on the degree of probability of occurrence of each risk. To collect the qualitative and quantitative experts’ responses, the data questionnaire was analyzed using the Artificial Neural Network (ANN) model to identify the significant risks in terms of cost and time of pile construction. The main finding showed that the significant risks are DR1 (improper and insufficient assessment of soil), CR1 (labor mistakes, rework, and idle times), OGR5 (Delay or inability of the owner to provide full possession of site), ECR1 (lack of funds: the lack of cash flow by the contractor), ECR6 (foreign exchange risks: unstable exchange rates, transfer restrictions, and supply and demand balance), ECR5 (economic crisis), PGR1 (failure to obtain approvals or permits), CR3 (low credibility), SCR1 (lack of management skills). This study assists the decision makers in a deeper understanding of the influencing factors, allowing them to make effective scheduling and comprehensive control over pile foundation projects.

Growth drivers in emerging capitalist economies: building blocks for a post-Keynesian analysis and an empirical exploration of the years before and after the Global Financial Crisis

This paper contributes to the growth models debate by expanding the concept of growth drivers to emerging capitalist economies (ECEs). Conceptually, the paper synthesizes growth drivers with a growth model operationalization based on GDP growth contributions and financial sector balances. Drawing on post-Keynesian and structuralist economics, as well as, empirical studies, seven growth drivers for ECEs are reviewed: income distribution, price and non-price competitiveness, commodity prices, private debt, foreign direct investment (FDI) and fiscal policy. Descriptive data for these drivers are presented for 19 regionally grouped ECEs between 2000 and 2019. On average, Asian ECEs exhibit higher growth rates, stable real exchange rates, high and increasing non-price competitiveness and high private debt levels. Latin American countries show comparatively lower growth rates, high but decreasing income inequality, unstable exchange rates and relatively expansionary fiscal policy after the Global Financial Crisis (GFC). Central and Eastern European countries generally display medium to high growth rates, lower income inequality, high non-price competitiveness, a substantial FDI stock and, after the GFC, real depreciations and contractionary fiscal policy. The assessment of cross-country growth drivers via bivariate coefficients reveals limited robust results, except for non-price competitiveness, which emerges as a significant driver. Additionally, we find indications that private debt and expansionary fiscal policy became more important for growth in ECEs after the GFC. This is in line with the emergence of domestic demand- and private debt-led growth models in ECEs following the GFC in the course of private deleveraging and austerity policies in developed capitalist economies.

Economic Growth, Inflation, and Monetary Policy in Pakistan: Preliminary Empirical Estimates

The recent increase in financial market volatility and the increased surge within developing world to become part of the global market have posed several challenges for policy-makers in the emerging markets to decide on a policy regime— monetary or exchange rate—that suits their needs and could also provide stability to the financial system. In view of the macroeconomic characteristics of these emerging economies, the choice of an appropriate policy becomes important to achieve certain targets such as sizeable domestic and foreign investment, reduced reliance on external borrowings, fiscal discipline, etc. These would require both price and exchange rate stability and country’s ability to deal with external shocks to maintain and achieve sustainable economic growth. Pakistan is no different and until recently had a history of macroeconomic imbalances with extremely high foreign (as well as domestic) debt, high budget and current account deficits, extremely low international reserves, high inflation, high nominal interest rates and low economic growth. The average economic growth over 40 years is around 4 percent. The main focus of any policy has been to achieve a sustainable growth pattern. However, due to a number of macroeconomic imbalances such as high budget deficits, extremely high indebtedness, low savings and investment rates, lack of fiscal discipline, undeveloped financial markets, unstable exchange rates along with high population growth and huge defence expenditure made this task almost impossible. Some of these macroeconomic imbalances contributed to episodes of high inflation and unemployment that the country experienced during most of the period since independence.

Alternative ways of resolving shareholder disputes in property relations in Ukraine and the EU

In the conditions of a war caused by the invasion of Russian troops on the territory of Ukraine in February 2022, an unstable exchange rate of the dollar and euro, the suspension of various structures. After such a full-scale invasion, Ukraine will need more than a decade to restore the economy. All business entities must work and ensure economic recovery. For the proper functioning of joint-stock companies, it is necessary that their activities are not hindered by the delayed resolution of disputes in court. It is necessary to settle disputes that arise in joint-stock companies using alternative

Effect of Raw Material Inventory on Operational Performance in An Emerging Economy: Insight from The Nigerian Manufacturing Sector

Inventory management in organizations comes with severe challenges, especially in emerging markets. The study examines the effect of the difficulties experienced in raw material management on quality, speed and flexibility, dependability, and cost in the Nigerian Manufacturing sector. This study empirically examines this relationship in a contemporary mixed methodological approach adopting survey and semi-structured interviews. Survey questionnaires were distributed to 703 inventory and supply chain managers in 22 manufacturing firms in Nigeria, while the interview was conducted for 25 managers from 9 manufacturing firms in Nigeria. The crystal-clear finding is that poor inventory management practices negatively affect the quality, speed, and flexibility of operations in Nigerian manufacturing. This contrasts with a second finding that dependability and cost are not statistically significant. We also discovered that difficulties manufacturing firms in emerging markets experience in managing their raw materials arise from government policies, high exchange rates, bureaucracy in importation and port Issues, inflation, infrastructural challenge, logistics and transportation challenges, poor management decisions, regulatory framework, and unstable exchange rate. In conclusion, our study highlights that inefficient raw material management severely affects the manufacturing firm's overall performance.

Моніторинг фінансової неплатоспроможності та ймовірності банкрутства

In countries with unstable economies and changing political systems, as well as adverse climatic conditions, the likelihood of bankruptcy is higher. Economic and political instability is now observed in Ukraine, where, due to hostilities, part of the business was forced to emigrate to safer places of doing business, and other part stopped operating. The increased pace of inflation, the unstable exchange rate of the national currency, the decline in business activity, the outflow of labor and investments from the country, including those related to scientific and technical developments, had a negative impact on the business climate in Ukraine. At the macroeconomic level, bankruptcy can be considered as a process of cleaning the economy from inefficient enterprises that undermine bona fide relationships with other business entities, and, as a result, maintaining the potential and attractiveness of the market. Bankruptcy as an economic phenomenon gives rise to a number of problems, including: reduced demand for producers’ products; decrease in production volumes; growth of debt to suppliers, the State budget, banks and other counterparties; delays in the payment of wages to employees; unpredictable change in the economic environment in general. That is why financial stability and sustainability of enterprises requires increased attention on the part of management. Diagnosis of bankruptcy of an enterprise allows timely identifying its insolvency, unprofitability, financial dependence and low business activity using a number of indicators given in classical models developed by economists and other specialists. However, due to the large number of developed models, there is a need to determine the most optimal for domestic enterprises. Both foreign and domestic scholars have developed methods and models to effectively assess the risks of bankruptcy. In this publication, the models of Springate, Altman and Tereshchenko are used on the example of the enterprise of «LCF SVITOCH LLC» and it is determined that it is financially sustainable, but the indicators of 2020 in all models are worse than the same indicators in 2018. Nowadays there are many methods (with their advantages and disadvantages) to assess the probability of bankruptcy. For their effective application in practice, it is important to choose the most optimal one, taking into account regional peculiarities.

Market Component of Economic Security of Agricultural Sectors

Market transformations modify the development of the agricultural sector and the possibility of uninterrupted operation in a market environment. At the same time, the subjects of the agricultural sector are subject to the potential destructive impact of risks that may threaten the profitability, solvency and have negative consequences for consumers of agricultural products. Under such conditions, strengthening the economic security of the agricultural sector is the basic principle of economic development. However, in the context of market transformations, there is a need to deepen research to assess the market component of economic security, as the latter is designed to protect against market errors, shortcomings in product and sales policy, as well as incorrect choice of pricing strategy. The research used methods: monographic, logical modeling, calculation-constructive, graphic, dynamic analysis, etc. The purpose of the article is to study the level of the market component of economic security of the agricultural sector and identify areas for ensuring its optimal level. An analysis of indicators and factors influencing the market component of the economic security of subjects of the agrarian sector was carried out. It was established that the level of the market component of economic security of subjects of the agrarian sector of the national economy and subjects of the agrarian sector of the Mykolaiv region during 2016-2020 was low. It is proven that increasing the level of the market component requires the subjects of the agrarian sector to develop and implement directions for improving the mechanism of managing the market component of economic security. An assessment of the level of the market component of the economic security of the subjects of the agricultural sector was carried out using the PESTEL-analysis based on expert assessments, and it was established that in the block of threats, the greatest number of points are economic (unstable exchange rate, difficulty of entering the market, “tinization” of the economy) and legal (insufficient legal justification of the market component of economic security) factors. Such threats are successfully leveled, as the change in the characteristics of doing business, the introduction of initiatives to stimulate access to markets, as well as the development of the legal framework for the market component of economic security will contribute to the transformation of threats into opportunities for growth

Analyzing Impact of Social Media Sentiments on Financial Markets

This paper analyzes the impact of continuously changing sentiments on apparently unstable stock exchange. Right when a monetary supporter decides to buy or sell stock, his decision is very much dependent on to rise or fall in price of the stock. In this paper, we look at the possibility of using notion attitudes (good versus negative) and moreover sentiments (delight, feel sorry for, etc) isolated from finance related news or tweets to help predict stock worth turns of events. This examination uses a model-self-ruling approach to manage uncover the mysterious components of stock exchange data using distinctive significant learning techniques like Recurrent Neural Networks (RNN), Long-Short Term Memory (LSTM), and Gated Recurrent Unit (GRU).

Ocean Science Diplomacy can Be a Game Changer to Promote the Access to Marine Technology in Latin America and the Caribbean

Ocean science is central in providing evidence for the implementation of the United Nations Law of the Sea Convention. The Convention’s provisions on transfer of marine technology to developing countries aim at strengthening scientific capabilities to promote equitable opportunities for these countries to exercise rights and obligations in managing the marine environment. Decades after the adoption of the Convention, these provisions are under implemented, despite the efforts of international organizations, such as IOC-UNESCO. Latin America and the Caribbean struggle to conduct marine scientific research and seize the opportunities of blue economy due to the limited access to state-of-the-art technology. Ocean science communities in these countries are subject to constraints not foreseeing in international treaties, such as unstable exchange rates, taxation, fees for transportation, costs of maintenance and calibration of technology, challenges to comply with technical standards, and intellectual property rights. Action is needed to overcome these challenges by promoting a closer tie between science and diplomacy. We discuss that this interplay between science and international relations, as we frame science diplomacy, can inform on how to progress in allowing countries in this region to develop relevant research and implement the Convention. We provide concrete examples of this transfer of marine technology and ways forward, in particular in the context of the UN Decade of Ocean Science for Sustainable Development (2021–2030).

Predicting foreign currency exchange rates using the numerical solution of the incompressible Navier–Stokes equations

The movement of exchange rates has similarities with physical phenomena, especially the movement of fluid in turbulence. The parameters change of the data information on the foreign exchange market will result in unstable exchange rates movement. These are according to changes in energy in the turbulence flow resulting in fluid particles moving randomly at fluctuating velocity. This study will predict the exchange rates of the United States Dollar (USD) to Indonesian Rupiah (IDR) using the incompressible Navier–Stokes equations which have been modified with economic parameters. The analogy of economic parameters to physical parameters such as Gross Domestic Product (GDP) as the distance between the two measured velocity points, the trade balance of two countries as fluid viscosity, and fluid flow velocity as exchange rate changes, while the inflation rates and interest rates are external forces. The numerical solution of the Navier–Stokes equations is solved using the Crank–Nicolson finite difference method. The results of the prediction of the exchange rate of USD to IDR are compared with actual exchange rate data. The exchange rate prediction results of the Navier–Stokes equations that calculated using the Crank–Nicolson scheme for one year produce an error percentage below 2.5 % of the actual exchange rate data.

Implementation of national cryptocurrency using ethereum development platform

While Ethereum run in public networks which make the blockchain size large and transaction run time longer than time for private or national network, that led to continuous worries over the expanding size of Ethereum Blockchain, which certainly reduce Cryptocurrency's effectiveness. The estimations were on increase and believed it would cross the node limit of 1 TB terribly shortly. If new consumer a full node enters to that blockchain and cryptocurrency world, a node is a computer software cum database of the blockchain, which a full node client must download on their personal computers to become a full node in the blockchain. in this way, the client can be verifying transaction on the network with the help of other nodes on the system. We proposed to implement national cryptocurrency which developed using Ethereum as a development platform that could serve national or regional people that has limited or slow internet connections like Iraq, in addition payments in countries with unstable fiat currencies, although cryptocurrencies are suffering from unstable exchange rates against fiat currencies, the use of national cryptocurrency instead of the native fiat cash could even be a far better alternative for individuals in certain countries like Iraq, Iran and Syria, with high rate of inflation. The reminder of this paper is arranging as following: an introduction, the advantages and drawbacks of cryptocurrencies, Background on Blockchain and Ethereum, implementation, results and conclusion.

English

Women in Malawi have been at the forefront of cross border trade both as a source of income and employment though they face numerous challenges. The paper investigates the challenges that the cross-border women face in the case of Limbe ICBT. A sample size of 30 participants was targeted that included 28 women cross-border traders, taxation authorities and Indigenous Business Association of Malawi (IBAM) officials. This data was analyzed using descriptive statistics. In total 24 valid questionnaires were collected of the 30 participants.  Challenges identified were lack of adequate funds to support businesses, high taxes, transportation costs, corruption by taxation-authorities officials, competition from big companies, unstable exchange rate and unstable prices from the market. The study revealed the relationship that exists between taxation authorities, women ICBT and IBAM though the relationship is not as strong as expected. It was established that none of the ICBT women were aware of the existence of regional protocols and none seem to be knowledgeable about cross- border rules, regulations and other protocols when it comes to clearance of goods and services. Most of the ICBT do not know how the calculations of import duties and how other charges occur. They have no knowledge of how they are charged at the border. One of contributing factors is their level of education which is very low leading to poor understanding of rules, regulations and import protocols. It is recommended that taxation authorities should embark on providing comprehensive training to these women if they are to maximize the duty collection.   Key words: Women traders, small and medium-sized enterprises, Informal Cross Border Traders (ICBT), SADC.

The Burden of HER-2 Positive Patients in Sub-Saharan Africa: A Caregiver Perspective

Background and context: Several studies showed that the use of the recombinant monoclonal antibody trastuzumab, in addition to adjuvant chemotherapy, for breast cancer with overexpression of the HER-2 protein or amplification of the HER-2/neu gene reduced the risk of recurrence by 50% in women irrespective of nodal status. In Nigeria, breast cancer is the leading and the most common cancer in women. A trastuzumab brand known as Herceptin is the popular brand usually prescribed by the oncologist in Nigeria. Once a histopathology/immune-chemistry result shows HER-2 positive and oncologist informs that patient of the diagnosis being HER-2 positive; most patients emotionally breaks down due to cost of the drugs. In Nigeria, as at 2015 the cost of herceptin 455mg was N650,000 ($1857). As at June 2016 that same drug increased in cost to N1,100,000 ($3142) due to the unstable exchange rate in Nigeria. In Nigeria 90% of patients pay-out of pocket for treatment and drugs as the health insurance system in my country does not cover chemotherapy drugs. Several cancer patients with HER-2 patients face serious financial challenges in Nigeria, as so many experience spread of the cancer to vital organ when they are unable to get finance to purchase the life-saving drug for their HER-2 positive breast cancer subtype. Aim: To understand the burden of HER-2 diagnosis in Nigeria and stimulate advocacy for the reduction of the cost of Herceptin in Nigeria and other sub-Saharan Africa where finance is a serious impediment to accessing medical care. Strategy/Tactics: The study will present case studies of three Nigerian women who were diagnosed of HER-2. Interview was used as a method of data collection, informed consent were also completed by the patients before the interview. Program/Policy process: Our study reveals that there is a need to engage the federal and state governments, corporate organizations, insurance schemes and most importantly pharmaceutical companies to reduce cost of cancer drugs and particularly Herceptin. HER-2 breast cancer patients need to lead the advocacy for reduction in cost of drug at all levels. Outcomes: Our qualitative findings reveal that caregivers are mostly affected by the cost of drugs such as Herceptin. In some cases caregivers, sell valuables, take loan and go public to raise funds for the cancer drugs. What was learned: Most HER-2 positive breast cancer patient could not afford Herceptin and some waited for several months to raise funds, which is probably a factor in metastasis and low-survival.

GLOBAL ECONOMIC RECESSION: CAUSES AND EFFECTS ON NIGERIA BUILDING CONSTRUCTION INDUSTRY

In 2016, Nigeria’s real Gross Domestic Product (GDP) growth rate in the first quarter was -0.36% while the second quarter was -2.06% indicating economic recession. The purpose of this study is to examine the causes and the effects of economic recession on the building construction industry. The study adopted quantitative research approach by eliciting primary data through questionnaire which was administered to 244 respondents, of which 210 were returned and considered valid for further analysis. The data were analysed using descriptive statistics and relative importance index (RII) to rank the causes and effects of economic recession. The findings revealed three major causes of economic recession; unstable exchange rates (RII = 0.90), reduction in volume and price of crude oil (RII = 0.88) and excessive corrupt practices (RII = 0.78) while the three major effects of economic recession onthe Nigeria building construction industry identified were; high rate of unemployment (RII = 0.93), high rate of bankruptcy (RII = 0.89) and reduction in mortgage lending rate (RII = 0.89). The study concluded that economic recession has negative effects on the Nigeria building construction industry. This study however recommends among other stability of exchange rate through devaluation, diversification of economy, transparency and amendment of mortgage institution policies Findings from this study could be used to develop strategies for mitigating against the effects of recession on the performance of the building industry.

МОДЕЛЬ ІМПОРТОЗАМІЩЕННЯ НА ВІТЧИЗНЯНОМУ РИНКУ СВІТЛИХ НАФТОПРОДУКТІВ

У статті систематизовано проблеми, закономірності та фактори формування середовища конкуренції на українському ринку бензину та дизельного пального, виявлено особливості його взаємодії з іншими ринками та галузями національної економіки. Встановлено, що одним з головних дестабілізуючих чинників розвитку вітчизняного ринку автомобільного пального є надмірна імпортна залежність в умовах нестабільності валютного курсу. З урахування світового досвіду державного регулювання ринку автомобільного пального, обґрунтовано модель імпортозаміщення на вітчизняному ринку світлих нафтопродуктів, запропоновано використання кооперативних механізмів розвитку ринку бензину та дизельного пального. Запропоновано алгоритм встановлення імпортного мита на світлі нафтопродукти, який базується на використанні диференційованого географічного підходу і синхронізації з процесами модернізації вітчизняних нафтопереробних підприємств.

Investments in Agricultural Machinery and its Efficiency in Ukraine

One of the major conditions of effective agriculture production is sufficient farm mechanization. However, the unstable economic situation in Ukraine, combined with bureaucratic problems, an unstable currency exchange rate, and sharply changed trade routes (which has caused major losses to a number of farms and traders working with the Custom Union) created significant obstacles for investing in machinery in Ukraine. It is especially topical for small and medium farms that usually function in poor economic conditions without any adequate access to the credit market. Consequently, Ukrainian agriculture producers often have an inadequate mechanization rate. As a result, the productivity of Ukrainian farms is significantly lower as compared to other countries that have similar natural conditions in terms of temperatures, precipitation and quality of agricultural lands.A no less important problem is the lack of awareness of small and medium farms, which may not realize the effect that investment has in agriculture machinery. Thus, in order to provide specific numbers for potential investors and prove the efficiency of this fund placement, an expected direct economic effect from machinery investment (as an increased profit from higher yield) was estimated. The first step was to define those types of agricultural machinery that have significant impact on the yield and productivity levels for each of the most important crop types: grain, oil crops, vegetables, fruits, etc. Then, an impact of additional investment in various machinery means on crops yield was estimated. Finally, based on fixed prices and a discount rate, an expected additional profit generated by newly purchased machinery on an average farm was estimated. The model proved especially high profitability of investment in such machinery as ploughs, fertilizers spreaders, harvesters, tractors, and machines for irrigation – most of them are paid off (on a land parcel with area around 2000 ha) in three years or less.