FUNCTIONING FEATURES OF THE CURRENCY MARKET OF UKRAINE IN MODERN CONDITIONS

Abstract

Recently, the currency market of Ukraine has faced many challenges, firstly the restrictions related to the covid period, then the full-scale invasion of Ukraine made adjustments to its functioning. The sensitivity of the foreign exchange market to political and economic upheavals necessitates a rapid change in the course of currency regulation in Ukraine to ensure macroeconomic stability. The purpose of the article is to study the peculiarities of the functioning of the foreign exchange market in Ukraine based on the analysis of the main indicators that characterize it and the trends of currency regulation. It is noted that the National Bank of Ukraine, as the main executive body of currency regulation, carries out currency regulation in order to ensure macroeconomic stability. It was established that the easing of currency regulation after quarantine restrictions contributed to the development of the currency market, but as a result of the war, its operation completely changed. An analysis of the dynamics of the main indicators characterizing the state of the foreign exchange market was carried out: the exchange rate of the hryvnia against foreign currencies, the volume of bank transactions on the currency market with non-cash foreign currency, the volume of interventions by the National Bank of Ukraine, the volume of transactions with cash foreign currency, the volume of accumulated official international reserves. Emphasis is placed on the influence of the balance of payments on the foreign exchange market as the main exchange rate-forming factor. The key trends in the functioning of the foreign exchange market are identified and the currency regulation measures introduced by the NBU to stabilize it are given. Considerable attention was paid to the NBU's new strategy for easing currency restrictions, which provides for a regime of managed flexibility. In accordance with the adopted strategy, the main regulator relaxes most of the restrictions on trade operations, refuses to fix the exchange rate, but maintains tight monetary conditions due to sufficiently high interest rates to ensure the attractiveness of hryvnia assets and minimize risks to exchange rate stability. The new regime of currency regulation should contribute to the financial and economic stabilization of the domestic economy, the significant simplification of currency transactions, and will stimulate the attraction of foreign investments for the reconstruction of our state.