INTEREST RATE POLICY OF THE NATIONAL BANK OF UKRAINE AND ITS IMPACT ON THE COUNTRY'S ECONOMY

Abstract

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.