Monetary Policy During the War: National Bank of Ukraine Experience

Russia’s full-scale war against Ukraine has led to terrible human losses and catastrophic consequences for Ukraine’s economy. A large part of the country’s territory was occupied, and many key enterprises and businesses were significantly damaged or completely destroyed. Ukraine has faced a series of continuous missile attacks that destroyed businesses, and critical infrastructure, and killed civilians. Millions of Ukrainians are forced to move to safer regions of Ukraine or have gone abroad. In these conditions, the National Bank of Ukraine faced a huge challenge, how to ensure price and financial stability, uninterrupted functioning of banking and payment systems, and uninterrupted operation of state finances and the financial system in general. This Chapter examines the most important aspects of monetary policy, regulation of the banking system and financial markets, and smooth functioning of the payment system of Ukraine by the National Bank of Ukraine to ensure price and financial stability in the economy. The dynamics of the main macroeconomic indicators of the Ukrainian economy were analyzed. The main problems of monetary and exchange rate policy are characterized, and further steps are determined regarding the implementation of the main functions of the central bank of Ukraine in the conditions of war. Prospects of interaction with the IMF and the international community supporting Ukraine were considered.