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Ukraine's exchange policy: a quarter of uncertainty

O. Sharov

Economy and Forecasting, 2016, issue 2, 37-70

Abstract: The article deals with the basic elements of the exchange policy during Ukraine's independence – including monetary sovereignty, the degree of currency convertibility, the exchange rate regime, the exchange control mechanism and cooperation with the international monetary fund. The author provides a detailed analysis of the problem of selecting the appropriate direction of the exchange policy and points to the continuing uncertainty about this choice, and hence the lack of efficiency of the exchange policy in general. Ukrainian practice makes you pay attention to such a characteristic of the exchange policy as its focus on the own currency, i.e. the introduction of legal rules governing the relationship arising through use of the national currency in the currency operations (foreign exchange transactions between residents and within non-residents). Given this, the exchange policy should be formed on the basis of the principles adopted in other areas of the economic policy in order to ensure the integrity of a strategic approach to achieve the goals of a comprehensive economic policy (including exchange relations). The exchange policy should provide coordination and reasonable relationship of different components of the economic policy, in both internal and external areas, including the distinct interaction between national and international institutions of the monetary regulation. Only the presence and the use of the above analytical framework of monetary policy – in the form of professionally prepared and politically coherent laws, concepts, strategies and action programs in various fields of economy and policies – could provide certainty, consistency and effectiveness of the state monetary policy. Unfortunately, Ukraine was forced to implement its exchange policy in the absence of almost all previous conditions, which caused the uncertainty of the state monetary policy as regards its key elements, such as a general orientation (goal), the degree of currency convertibility, the exchange rate regime, foreign exchange market and currency control institutions. In addition, the most negative way on the foreign policy reflected the general uncertainty about the economic policy and overall strategy for economic development. Such uncertainty caused a chain reaction of uncertainty as to some important elements of the exchange policy.

Date: 2016
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