ECONOMIC EFFECTS OF STATE REGULATION OF FOREIGN EXCHANGE MARKET

Vasyl Lagutin, Oleksandr Zhurba

Анотація


Introduction. Today, the currency market plays a significant role in the economic development of Ukraine. From specific decisions of the National Bank to regulate the activities of the foreign exchange market directly depends on the behavior of market participants. In such circumstances, the effects of specific solutions of National Bank greatly increase. The policy of currency restrictions, which was a response to the increasing of devaluation of the hryvnia in early 2014’s, was not effective and has only exacerbated the fall of the national currency. This cause the regulator to a policy of currency liberalization, which has had a positive impact. So it is important to provide a detailed analysis of specific decisions taken by the National Bank of Ukraine and assessment of their impact on the currency market.

Purpose. Analysis of the main effects of state regulation of the foreign exchange market of Ukraine in 2014-2016.

Methods. Analysis, synthesis, induction, deduction, comparison.

Results. Revealed the development trends of the currency market of Ukraine in the period of 2010-2016. The specific features of the monetary policy of the National Bank of Ukraine during this period and analyzed regulatory decisions that were made to stabilize the currency market. The negative effects of the policy of foreign exchange restrictions that led to the deterioration of the devaluation of the national currency. Carried out an analytical review of the dynamics of the development of the illegal foreign exchange market of Ukraine. The threatening factors, which were not considered by the National Bank when conducting the stabilization of the currency market were specified. Emphasized the positive effects of the transition to the liberalization of the currency market and reasonably caused this stabilization of the exchange rate.

Originality. The classification of the possible negative consequences of the policy of exchange restrictions during exacerbation of financial crisis were extended.

Conclusion. The effects of state regulation of the foreign exchange market is not always positive, they depend on the appropriateness and the correct application of certain tools. Policy currency restrictions, held by the National Bank in 2014-2015, as a response to the increasing devaluation of the hryvnia had negative consequences in the form of significant growth in illegal foreign exchange market and accelerated the pace of devaluation. In 2016, the controller moves to a policy of liberalization of the foreign exchange market. The cancellation of a number of limitations, some of which operated for many years, has small positive effects. The most important of which is the gradual reduction of the illegal foreign exchange market and reduce the volatility of the exchange rate of the hryvnia.


Ключові слова


foreign exchange market; monetary policy; illegal currency market; the “dollarization”; devaluation; currency crisis; exchange rate mechanism; foreign exchange intervention.

Посилання


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