Monetary Policy of The National Bank of Ukraine UnderFinancial Destabilization and Its Impact on The Banking System

Анотація

The purpose of this article is to assess the effectiveness of the monetary policy implemented by the National Bank of Ukraine amid financial ‎destabilization caused by war. The analysis focuses on the impact of key regulatory instruments on the banking sector and explores the ‎adaptability of monetary measures in crisis conditions. This study aims to assess the effectiveness of the monetary policy of the ‎National Bank of Ukraine (NBU) under conditions of financial destabilization and to analyze its impact on the activities of commercial ‎banks to identify key regulatory instruments, their consequences for the banking sector, and prospects for further adaptation. The study ‎examines the specific features of the NBU’s monetary policy in ensuring macroeconomic stability and supporting the banking sector amid ‎financial destabilization. This study evaluates the NBU’s core tools, including the key policy rate, foreign exchange interventions, and li-‎liquidity management mechanisms, to determine their outcomes for financial stability. Special attention is given to the sharp increase of the ‎key policy rate to 25% in 2022, which aimed to contain inflationary pressures and currency volatility. The dynamics of foreign exchange ‎interventions, which shifted from reserve accumulation to large-scale sales exceeding USD 35 billion in 2024, are examined to highlight ‎vulnerabilities in the external balance. The findings demonstrate that while strict liquidity controls helped stabilize macroeconomic indicators, ‎they simultaneously limited credit access and constrained economic recovery. The results underscore the importance of maintaining a balance between inflation control, exchange rate stability, and support for the banking system. In the long term, the effectiveness of monetary ‎policy will depend on the NBU’s capacity to adapt its instruments to evolving macroeconomic challenges without undermining financial ‎sector resilience‎.

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