THE FINANCIAL SYSTEM OF UKRAINE DURING THE WAR: CHALLENGES AND PROSPECTS

Abstract

The financial system serves as the foundation of a country's economic stability and development. Its effectiveness determines the resilience of the state budget, the level of social security, and competitiveness in the international arena. This article explores the peculiarities of Ukraine’s financial system functioning under martial law, analyzing the main challenges it faces, as well as opportunities for adaptation and reform. Particular attention is paid to the dynamics of the consumer price index and international reserves over recent years, emphasizing the importance of their efficient utilization. The key factors influencing the foreign exchange market and the role of international financial institutions in supporting the economy are also outlined. Additionally, the study examines the necessary measures for restoring the banking sector and stimulating investment flows. It is noted that the financial system has undergone significant transformations due to wartime conditions, requiring urgent fiscal and monetary policy adjustments. The research highlights the need for fiscal reforms, strengthening monetary policy, and improving financial management efficiency to enhance the system’s resilience. It also considers the impact of international financial assistance, particularly from institutions such as the International Monetary Fund and the World Bank, in stabilizing Ukraine’s economy. Furthermore, the study investigates the effects of banking system reforms, including the introduction of a new capital structure and the relaxation of currency restrictions, which have contributed to maintaining the continuous operation of the financial sector. The article discusses the necessity of strengthening financial market supervision and implementing anti-crisis measures to prevent capital outflows and inflationary pressures. To ensure long-term economic stability, the research proposes strategic policies aimed at increasing financial transparency, optimizing public debt management, and fostering an investment-friendly climate. The findings of this study provide practical recommendations for policymakers, financial institutions, and investors, outlining the steps needed to rebuild and strengthen Ukraine’s financial system during and after the war.