Activities of the National Bank of Ukraine under Martial Law

Sophia Lobozynska; Iryna Skomorovych; Ulyana Vladychyn

doi:10.26354/bb.3.1.86.2022

Published : 2022-04-14

Vol. 86 No. 1 (2022)

Activities of the National Bank of Ukraine under Martial Law

Sophia Lobozynska

https://orcid.org/0000-0001-5483-6864

Iryna Skomorovych

https://orcid.org/0000-0002-8574-6770

Ulyana Vladychyn

https://orcid.org/0000-0002-6916-6688

DOI: https://doi.org/10.26354/bb.3.1.86.2022

Abstract

The full-scale invasion of Russian troops into Ukraine has created new challenges for the National Bank of Ukraine (NBU). In the article the authors have used system analysis to study the efficiency of the direct methods of the NBU in regulating the money market. It was established that the NBU took timely measures to ensure uninterrupted functioning of the country's economy by introducing military refinancing to maintain the liquidity of the banking system, set a fixed exchange rate and low restrictions on the foreign exchange market to restrict the rapid devaluation of the national currency. The activities of the NBU to fill the economy with money to finance significant military expenditures by buying and selling military bonds of Ukrainian Government, transferring profits to the State Budget, establishing relations with international financial organizations. In order to achieve a rapid effect of preventive measures, the NBU provides direct lending to the Government through the purchase of military bonds on the primary market. In the long run, the NBU should abandon its subordination to the Government and move to market-based monetary governance.

Keywords:

financial stability, foreign exchange market regulation, liquidity of the banking system, cash flows, military bonds, military refinancing, international macroeconomic financial assistance

JEL Codes

E52, E58, G18

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Lobozynska, S., Skomorovych, I., & Vladychyn, U. (2022). Activities of the National Bank of Ukraine under Martial Law. Safe Bank, 86(1), 49–64. https://doi.org/10.26354/bb.3.1.86.2022

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This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.