USE OF CURRENCY REGULATION INSTRUMENTS IN THE CONDITIONS OF MARITAL STATE

Abstract

Ukraine's economy is vulnerable to exchange rate changes. Exchange rate changes are a powerful factor in inflation. In the conditions of martial law, the currency market is a vulnerable segment of the domestic financial market. Panic moods of the population and business quickly affect the exchange rate. Therefore, the country's central bank must ensure exchange rate stability. The search and implementation of appropriate tools of currency regulation will help to effectively solve this task. The study of the problem of the use of instruments of currency regulation in the conditions of martial law in the scientific literature is insufficient. The article defines that currency regulation is a complex of measures of state bodies. These measures are the establishment of rules for operations with currency values. The purpose of currency regulation is exchange rate stability of the national currency. Currency regulation is carried out with the help of market and administrative instruments. Market instruments are currency interventions, diversification of gold and foreign exchange reserves, exchange rate regulation. Administrative instruments include devaluation or revaluation, as well as currency restrictions. During the war, the central banks of various countries used mainly administrative measures of currency regulation. The most popular were the devaluation of the national currency and currency restrictions. At the beginning of the war, the NBU used foreign experience to maintain exchange rate stability. The NBU established a fixed exchange rate regime and banned most cash and non-cash currency transactions. Implementation of these measures contributed to exchange rate stabilization. Subsequently, the NBU began to loosen currency restrictions. However, a long regime of fixed exchange rate creates imbalances in the foreign exchange market and depletes gold and foreign exchange reserves. It is important to return to the market mechanisms of the currency market. This will be possible under certain conditions. Such conditions are the growth of the export component of the balance of payments, the reduction of inflation rates and the growth of GDP. This state of the economy of Ukraine will allow a return to the regime of floating exchange rate and currency liberalization.