Currency Exchange Rate Formation in Ukraine: Problems and Ways of Optimization

Анотація

The conducted analysis proved the presence of quite diverse trends in the foreign exchange market of Ukraine: the national currency is undervalued, the exchange rate is unstable, a significant burden on the financial system as a whole due to the growth of public debt, a high level of dollarization of the economy. That is, on the one hand, there are destructive processes, including those of a chronic nature. On the other hand, the national currency market quickly and easily picks up new opportunities that come to all spheres of economic life, related to digitization and electronic means of trade. It was revealed that of the key macroeconomic variables that determine the exchange rate: gross domestic product, government debt, gold and foreign exchange reserves, balance of payments, inflation, it is inflation that has the greatest influence on the exchange rate. Key macroeconomic parameters determining the state of the foreign exchange market can have a destabilizing effect on the foreign exchange market both at a fixed and at a floating exchange rate. It has been proven that the use of any of these regimes in their "pure" form is particularly risky for the economy. An algorithm for making a decision on softening/increasing course flexibility was proposed.

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