MONETARY POLICY DURING THE WAR AND POST-WAR PERIODS: FOREIGN EXPERIENCE AND UKRAINIAN PRACTICE

The article is devoted to the study of the monetary policy experiences of other countries that have undergone military conflicts during the active phase of the war and post-war periods, consider current steps of the National Bank of Ukraine (NBU), and to provide recommendations to the NBU on the effectiveness of decisions and actions in the monetary policy domain. Firstly, we studied the examples of foreign countries that had faced armed conflicts in the past. It was discovered that during wartime, monetary policy objectives shift to address the unique challenges of a military economy, where government spending increases, and the state plays a larger role. Historical examples from World War II demonstrate how central banks employed monetary policy tools, such as purchasing government securities and imposing credit controls, to manage war-related economic challenges. Examples from Israel and Croatia illustrate that many countries have successfully recovered from wartime crises through independent monetary policy, fiscal consolidation, and market financing. The current monetary policy in Ukraine was considered. To combat inflation and protect hryvnia assets, the NBU implemented an active interest rate policy, raised required reserve ratios for banks, and kept a high key policy rate of 25%. Although inflation has been stabilizing, and NBU started to decrease key policy rate starting from July 2023, there are still potential risks. As for October 27, 2023, the key policy rate was set at 16%. At the same time, the expected trajectory of inflation limit the scope for softening the interest rate policy next year. It was determined that under these conditions, the trust of households and businesses in the NBU and the regulator's constant communication with society are extremely important. Collaboration with media, educational institutions, and banks, as well as developing their application, can further enhance communication and financial literacy efforts.