KEY FACTORS OF INFLATION AND WAYS OF ITS REDUCTION IN UKRAINE

Keywords: inflation, currency, exchange rate, banks, National Bank of Ukraine

Abstract

The factors influencing the level of inflation in Ukraine are investigated, in particular: money supply, administratively regulated prices (tariffs), market of credit resources, realistic planning of sources of income and state of execution of the state budget, debt burden on the state and corporations, financial condition of the banking system, banking deposits of population, wages, international reserves, industrial production and GDP, employment, business activity, exchange rate of the national currency; the price dynamics in foreign markets, the main indicators of the external sector, the inflow of private money transfers from abroad.

The state’s actions to reduce inflation in Ukraine should include, in particular: the maintenance of monetary emission within the parameters set by the state budget; restriction of the purchase of securities issued by the government to the National Bank of Ukraine portfolio; reduction of recapitalization of state banks; the accumulation of international reserves, the implementation of policies for their rational use; stimulating the timely return of exporters to the country; measures aimed at reducing the negative balance of trade balance; ensuring a positive level of interest rates relative to projected core inflation; implementation of balanced budget policy; eliminating quasi-fiscal imbalances; shadowing of the economy; reduction of the share of the sovereign debt currency component; an increase in the share of domestic debt instruments in the budget deficit financing structure; prolongation of the term of government securities circulation; implementation of measures to attract people’s savings in debt instruments; bringing the capital of the banking system in line with Basel III requirements; reforming state banks in the direction of raising corporate governance standards with the subsequent partial privatization of them; activation of the sale of property of troubled banks; increase of the state guaranteed amount of indemnity repayment; decrease of yield of government securities for activation of lending; reduction of discount rate for cheaper credit resources.

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Published
2019-07-02
How to Cite
Hladkykh, D. (2019). KEY FACTORS OF INFLATION AND WAYS OF ITS REDUCTION IN UKRAINE. Strategic Priorities, 49(1), 91-101. Retrieved from https://niss-priority.com/index.php/journal/article/view/242