THE IMPACT OF THE PANDEMIC ON THE CURRENCY MARKET OF UKRAINE
Keywords:coronavirus infection, foreign exchange market, foreign exchange risks, foreign exchange, exchange rate, bank, interventions.
Introduction. The epidemiological crisis caused by the COVID-19 coronavirus pandemic has severely affected the economy of Ukraine, including currency market. Therefore, in the current situation, its main problem is instability, which leads to a high degree of volatility of the national currency. Purpose and objectives. The purpose of the article is to consider the main trends and features of Ukraine’s foreign exchange market functioning in a pandemic. Achieving this goal determines the solution of the following tasks: to highlight the nature and functions of the foreign exchange market; to analyze the impact of the epidemiological crisis on the indicators of the foreign exchange market in 2020 and compare them with the corresponding indicators in 2019; to single out the consequences of foreign exchange rate fluctuations in 2020; propose measures to overcome them and scenarios for the development of the domestic foreign exchange market after the coronavirus pandemic. Methods. When disclosing the content of the foreign exchange market, a logical method was used; methods of system analysis – to identify structural links between the functions of the foreign exchange market; comparative analysis – allowed to compare phenomena in order to establish similarities or differences between them. Results. The article covers the interpretation of the definition of the foreign exchange market and its subjects. The main trends in the development of the foreign exchange market of Ukraine in a pandemic are identified. The influence of the epidemiological crisis on its indicators is analyzed. It is established that in March 2020 the net sale of currency by the central bank amounted to 2.2 billion dollars. USA, the regulator smoothed fluctuations towards the devaluation of the hryvnia during the introduction of quarantine measures – the volume of net purchases of foreign currency for the year exceeded 1 billion dollars. USA. Due to the unfolding of the epidemiological crisis, the demand for foreign currency, in particular for the US dollar and the euro, has significantly increased. This is due to the fact that citizens view these currencies as a way to protect against possible inflationary fluctuations during the crisis, and therefore show increased demand for foreign currency due to inflation expectations (the balance of cash foreign currency transactions +84.6 million US dollars in equivalent, compared to 2019 -181.5 million US dollars in equivalent). In turn, this increased the devaluation pressure on the hryvnia, and the balance of interventions in December 2020 became negative (-289.2 million US dollars).. Scenarios for the development of the domestic foreign exchange market after the coronavirus pandemic are proposed. Conclusion. Thus, the implementation of the National Bank of Ukraine's monetary policy and ensuring the stability of money circulation in a pandemic should provide for the improvement of the legislative and regulatory framework governing the foreign exchange market; transition to a more flexible system of course formation; formation of the institute of currency market makers; expanding the range of currency risk hedging instruments, as well as reducing the level of dollarization of the domestic market by improving payment instruments and mechanisms.
How to quote:
Gonchar GP, Chornovol AA, Shibirina SO The impact of the pandemic on the foreign exchange market
Of Ukraine. Scientific notes of the National University "Ostroh Academy".
Series "Economics": a scientific journal. Ostrog: NaUOA Publishing House, March 2021.
№ 20 (48). Pp. 102–111.
Formula: 0; fig .: 1; tab .: 3; bibl .: 10.
1. Voznyakovskaya KA The role of banking institutions during the pandemic. Current trends in the development of Ukrainian legislation in the context of state reforms: materials International. scientific-practical conf. Chernivtsi.
2021. S. 222–225.
Vozniakovska, K.A. (2021). The role of banking institutions during the pandemic period [The role of banking institutions during
the pandemic]. Cuchasni tendentsii rozvytku zakonodavstva Ukrainy v konteksti provedennia derzhavnykh reform:
materials Mizhnar. scientific-practical conf. Chernivtsi, 222-225 [in Ukrainian].
2. Garyaga LO Exchange rate instability in Ukraine. Bulletin of socio-economic research. 2015
№ 57. S. 43–50.
Hariaha, L.O. (2015). Exchange rate instability in Ukraine [Exchange rate instability in Ukraine]. Visnyk
sotsialnoekonomichnykh doslidzhen [Bulletin of Socio-Economic Research], 57, 43-50 [in Ukrainian].
3. Gruy A., Lepushinsky V. The use of foreign exchange interventions as an additional tool under the regime
inflation targeting: the example of Ukraine. Bulletin of the National Bank of Ukraine. 2016. № 238. S. 41–59.
Hrui, A., Lepushynskyi, V. (2016). Zastosuvannia valiutnykh interventsii yak dodatkovoho instrumentu za rezhymu
infliatsiinoho tarhetuvannia: pryklad Ukrainy [The use of foreign exchange interventions as an additional tool under
the inflation targeting regime: the example of Ukraine]. Visnyk Natsionalnoho banka Ukrainy [Bulletin of the National
Bank of Ukraine], 238, 41-59 [in Ukrainian].
4. Dolbneva DV The impact of COVID-19 on the economy of the world. Problems of the economy. 2020. № 1 (43). Pp. 20–26.
Dolbnieva, DV (2020). Vplyv COVID-19 na ekonomiku krain svitu [The impact of COVID-19 on the economies
of the world]. Problemy ekonomiky [Problems of Economics], 1 (43), 20-26 [in Ukrainian].
5. NBU report on financial stability. URL: https://bank.gov.ua/admin_uploads/article/FSR_2020-H2.pdf?v=4
(appeal date: 23.03.2021).
Zvit NBU pro finansovu stabilnist [NBU report on financial stability]. <https://bank.gov.ua/admin_uploads/article/
FSR_2020-H2.pdf? V = 4> (2021, march, 23) [in Ukrainian].
6. Maksimova EV, Morozov VV COVID-19 and globalization. Innovation and investment. 2020. № 5. S. 86–90.
Maksymova, EV, Morozov, VV (2020). COVID-19 and globalization [COVID-19 and globalization]. Ynnovatsyy
y ynvestytsyy [Innovation and Investment], 5, 86-90 [in Ukrainian].
7. Meshcheryakov AA, Sopotyan SV Problems of development of the foreign exchange market of Ukraine in the context of security
financial security. Bulletin of the Academy of Customs Service of Ukraine. 2014. № 1. S. 40–45.
Meshcheriakov, AA, Sopotian, SV (2014). Problems of development of the currency market of Ukraine in a context
zabezpechennia finansovoi bezpeky [Problems of development of the foreign exchange market of Ukraine in the context
of ensuring financial security]. Visnyk Akademii mytnoi sluzhby Ukrainy [Bulletin of the Academy of Customs Service
of Ukraine], 1, 40-45 [in Ukrainian].
8. The NBU recommends that banks restructure loans to borrowers affected by related
with a restriction pandemic. URL: https://bank.gov.ua/ua/news/all/nbu-rekomenduye-bankamrestrukturizuvati-kreditipozichalnikam-yaki-postrajdali-cherez-povyazani-izpandemiyeyu-obmejennya (access date: 22.03.2021).
NBU recommends that banks restructure the loans to borrowers, yaki postrazhdaly cherez poviazani from
pandemiieiu obmezhennia [The NBU recommends that banks restructure loans to borrowers affected by pandemic-related
restrictions]. <https://bank.gov.ua/ua/news/all/nbu-rekomenduye-bankamrestrukturizuvati-krediti-pozichalnikamyaki-postrajdali-cherez-povyazani-izpandemiyeyu-obmejennya> (2021, march, 22) [in Ukrainian].
9. Official site of the National Bank of Ukraine. URL: https://bank.gov.ua (access date: 21.03.2021).
Ofitsiinyi sait Natsionalnoho banku Ukrainy [Official site of the National Bank of Ukraine]. <https://bank.gov.ua>
(2021, March, 21) [in Ukrainian].
10. Stasiuk AV, Stasiuk AV, Zavoloka LO Analysis of the foreign exchange market in 2015-2017: problems and prospects for development. Money, finance and credit. 2018. № 24. S. 369–372.
Stasiuk, AV, Stasiuk, AV, Zavoloka, L.O. (2018). Currency market analysis 2015-2017: problems and prospects
rozvytku [Analysis of the foreign exchange market in 2015-2017: problems and prospects for development]. Hroshi,
Finance and Credit, 24, 369-372 [in Ukrainian].
This magazine is licensed under a Creative Commons Attribution-Noncommercial 4.0 International License.
The texts of the journal's articles are checked with the help of an anti-plagiarist