DYNAMICS OF UKRAINIAN BANKS’ REFINANCING DURING INFLATION TARGETING

Inflation targeting as a mode of monetary policy requires new approaches to the implementation of traditional monetary instruments, and to a profound analysis of the results of their implementation. One of the modern and necessary monetary instruments is the banks' refinancing, because by its help the NBU regulates the liquidity of the banking system in general and of banks in particular, the cost of credit resources, contributes to the stability of money turnover. The essence, features and mechanism of refinancing are the subject of research of many scientists, but insufficient attention has been paid to the current conditions (during inflation targeting) of its implementation. The main purpose of the article was to analyze the volumes, cost and structure of the NBU's refinancing operations. In particular, during the research were planned solution of such tasks: detailed review of the regulatory framework and the separation of operations that the NBU assigns to refinancing operations; analysis of the dynamics of interest rates on refinancing operations in the period of inflation targeting; analysis of the dynamics and structure of the NBU's refinancing operations in the period of inflation targeting revealing historical patterns. For the analyzed period there is the tendency to decrease interest rates on the NBU's refinancing operations. This is due to reduction of the NBU's interest rate to which interest rates on refinancing operations are “tied”. For the inflation targeting period the largest volume of refinancing was granted to Ukrainian banks in 2018, although, if current dynamics are maintained in 2020, there will be the likelihood of exceeding refinancing at the end of the year. The structure of the NBU's refinancing operations has changed in the direction of dominance of overnight loans in 2018 and 2020. The existing changes in the structure of the NBU's refinancing operations are the sign of the development of this monetary instrument, the change of its priority goals due to changes in the state of the banking system of Ukraine in particular and the economic situation in the country in general. In perspective the main directions of the NBU's refinancing operations perfecting are improvement of the regulatory framework and the mechanism of refinancing for each separate operation; improvement of the monitoring system for the use of credit resource obtained in accordance with refinancing operations for the sake of inhibiting speculative actions in general and on the interbank foreign exchange market in particular.