Assessing the Impact of Currency Risk on the Banking Ecosystem in Ukraine

Анотація

The article examines currency risk as a key factor affecting the stability of the banking ecosystem, especially in times of economic instability. Currency risk is defined as a potential threat due to fluctuations in exchange rates, which can lead to financial losses or changes in cash flows of banks. The article analyses the banking ecosystem as a complex system of financial and non-financial institutions that interact to provide services. The study focuses on assessing the impact of currency risk on the banking system of Ukraine and developing effective approaches to its management. For this purpose, the methods of correlation and regression analysis and the study of macroeconomic factors that affect the financial performance of banks are used. Particular attention is paid to determining the relationship between exchange rate fluctuations and the main financial indicators of banks, such as deposits, loans and profits. The study found significant correlations between currency fluctuations and banking performance, which underscores the need to implement effective methods of managing currency risk. In particular, approaches such as hedging and administrative restrictions help to maintain financial stability. The results also open up the possibility of forecasting the future impact of currency fluctuations on the banking sector. The methods of minimising currency risk, such as hedging, administrative restrictions and balancing currency assets and liabilities, are considered. The analysis of trends has shown the possibility of forecasting currency fluctuations and their impact on the financial results of banks. The article also provides examples of the National Bank of Ukraine’s policies on restricting foreign exchange transactions in the context of economic instability, which demonstrates the effectiveness of administrative measures. The value of the study lies in the in-depth analysis of currency risk in the context of economic instability and martial law in Ukraine, which makes the work particularly relevant in the current realities. The practical recommendations contained in the study help to minimise currency risk, which is important for the stability of the banking system and the country’s economic development. Overall, the study highlights the importance of currency risk assessment as one of the key factors affecting the stability of the Ukrainian banking ecosystem. Therefore, effective currency risk management is important for maintaining the stability of the banking system, developing financial institutions, and ensuring economic growth in Ukraine.

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