Monetary Policy Adjustments in Wartime

Анотація

Introduction. In times of war, monetary policy plays a key role in ensuring macro-financial stability, maintaining the functioning of the banking system, and restoring economic activity. Military risks, disruptions to production and logistics chains, rising inflationary and devaluation expectations, as well as the general instability of the financial environment necessitate the adaptation of monetary regulation of the economy to new conditions. Therefore, determining the directions for optimizing monetary policy, improving its impact on business activity and the functioning of the credit mechanism is becoming increasingly important and relevant. Purpose. The purpose of the article is to study the implementation of monetary policy in wartime, determine the effectiveness of the inflation targeting regime in Ukraine, and substantiate the directions for optimizing monetary regulation to ensure macro-financial stability and stimulate crediting to the real sector of the economy. Methodology. The theoretical and methodological basis of the study is modern concepts of monetary theory, in particular the theory of money neutrality in the long run and the functioning of the transmission mechanism of monetary policy. The study uses general scientific methods of analysis and synthesis, comparison, summarization and grouping, as well as the method of scientific abstraction to summarize the results of the functioning of the main instruments of monetary regulation in wartime. Results. The study found limited effectiveness of the interest rate channel of monetary transmission in conditions of dominance of cost-push inflation and a high level of openness of the national economy. It is substantiated that the reorientation of monetary policy towards achieving inflation targets while abandoning active support for exchange rate stability contributes to the narrowing of the credit market, the suppression of investment activity, and the strengthening of devaluation expectations. The need for a transition to a more flexible model of monetary regulation, which involves activating the exchange rate channel of influence and stimulating bank crediting to the real sector of the economy, has been proven.

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