scholarly journals DIRECTIONS OF ADAPTATION OF THE NBU MONEY AND CREDIT ADJUSTMENT TO THE INFLATION TARGETING MODE ON THE EXAMPLE OF NEW ZEALAND

2018 ◽  
pp. 196-205
Author(s):  
Liudmyla Seheda
Keyword(s):  
Monetary Policy ◽  
New Zealand ◽  
Inflation Targeting ◽  
Banking System ◽  
Business Environment ◽  
Transitional Period ◽  
Mathematical Methods ◽  
National Interests ◽  
Policy Objectives ◽  
Low Efficiency

Introduction. The article deals with the main problems of adaptation of the NBU monetary and credit regulation to the inflation-targeting mode. The main reasons for the low efficiency of the introduction of world experience in the field of monetary policy to domestic realities are considered. The methodical recommendations for increasing the efficiency of monetary regulation, optimizing the monetary mode of inflation targeting and implementing the monetary rule in the practice of realization of monetary policy of the NBU are developed. Purpose. The article aims to study the world experience in the field of adapting monetary and credit regulation to the monetary mode of inflation targeting on the example of New Zealand and to develop the theoretical and practical conclusions for Ukraine. Method (methodology). The following general scientific methods have been used in this research: method of synthesis and generalization (to substantiate the basic problems of monetary regulation in the context of realization of the monetary regime of inflation targeting in Ukraine); methods of analysis and comparison (to study the experience of New Zealand in the field of the formation of the monetary mode of inflationary regulation); statistical and mathematical methods (to develop monetary rule in Ukraine). Results. The main problems of low efficiency of monetary regulation in Ukraine that are related to the neglect of national interests, imbalances in the development of the national economy, inappropriate structure of exports and imports, negative business environment, and conditions for the absorption of monetary impulses have been identified. The experience of New Zealand in the field of the formation of the monetary mode of inflation targeting has been researched. It has been made the conclusion concerning a long transitional period during which, at the level of inflationary purposes, de facto, as intermediate monetary policy objectives, the exchange rate and liquidity of the banking system are used. The monetary rule for Ukraine has been developed. The methodical recommendations for increasing the effectiveness of the monetary and credit regulation of the NBU within the framework of flexible inflation targeting have been worked out.

scholarly journals The Impact of Monetary Policy on the Financial Stability of the Banking System: Setting a Modeling Problem

2021 ◽  
Vol 2 (517) ◽  
pp. 81-88
Author(s):  
A. D. Pilko ◽  
◽  
V. R. Kramar ◽  
Keyword(s):  
Monetary Policy ◽  
Financial Stability ◽  
Inflation Targeting ◽  
Banking System ◽  
Practical Implementation ◽  
Development Scenarios ◽  
Dynamic Stochastic ◽  
Low Efficiency ◽  
Traditional Approaches ◽  
The Impact

The publication is concerned with highlighting the results of the carried out analysis of the existing practice of developing macroeconomic models directed towards determining the main parameters of monetary policy of central banks, as well as assessing their impact on the indicators of financial stability of the banking system. Given the low efficiency of the traditional approaches to the formation of the monetary rule both in countries with developed market economies and in countries with small open economies (in particular, Taylor rule), possible ways to solve this problem are proposed taking into account the existing experience in shaping monetary policy parameters in the context of inflation targeting, which is already available at the NBU. The strengths and weaknesses of the main approaches to the modeling of the monetary transmission mechanism, as well as the forecasting of its impact on the financial stability of the banking system, which are used in the formation of basic and auxiliary models of the central bank, are analyzed. Particular attention is paid to structural econometric models, vector autoregression models and dynamic stochastic models of general equilibrium. As a result, a possible variant for developing an approach to macroeconomic modeling is proposed, in the framework of which assessment and analysis of the impact of monetary policy on the indicators of financial stability of the banking system is envisaged. The practical implementation of this approach makes it possible to develop models for assessing and analyzing the efficiency of the current monetary policy, projecting macroeconomic development scenarios in the short and medium term, which will both directly and indirectly determine the indicators of financial stability of the banking system.

scholarly journals Polityka pieniężna Narodowego Banku Polskiego od roku 1989

2015 ◽  
pp. 173-192
Author(s):  
Paweł Franka ◽  
Anna Wisz
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Exchange Rates ◽  
Inflation Targeting ◽  
Banking System ◽  
Policy Instruments ◽  
Open Market ◽  
The Past ◽  
National Bank

The article discusses the activities of National Bank of Poland during the past twenty-five year and more specifically in the years 1989–2013 with particular emphasis on monetary policy. During this time, the Polish central bank has undergone fundamental change, starting from the position of the so-called monobank, i.e. bank without autonomy in activities, characteristic of planned economy. The article describes the process of transformation of the National Bank of Poland to the role of a central bank operating in a market economy. The paper emphasizes all the important events in the transformation, including building of a two-tier banking system, the gradual replacement of the administrative measures by monetary policy instruments, currency denomination, constitutional guarantees of the role and independence of the National Bank of Poland, creation of the Monetary Policy Council – a departure from the single monetary policy-making in favor of collegiality, changing the monetary policy strategy to direct inflation targeting, bank exchange rates policy, open market operations.

scholarly journals The effectiveness of the inflation targeting regime as the basis for monetary policy in the conditions of crisis in the economy

2021 ◽  
pp. 20
Author(s):  
Oleksandr Dziubliuk
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Large Scale ◽  
Inflation Targeting ◽  
Developing Economies ◽  
Developed Countries ◽  
Gradual Transition ◽  
Monetary Regime ◽  
Low Efficiency ◽  
The Impact

Introduction. Inflation targeting, as a commitment by the central bank to adhere to quantitative inflation rates, has become a fairly common monetary regime in the last few decades in developed countries and developing economies. However, the impact of the pandemic crisis on the course of economic processes has revealed serious problems associated with the low efficiency of this regime. Therefore, there is an objective need to re-evaluate the system in which the central bank focuses monetary regulation solely on price stability, ignoring other strategic directions of government policy related to the need to save economic activity and prevent a large-scale recession.Purpose. Clarification of the peculiarities of the implementation of monetary policy on the basis of the inflation targeting regime and identification of problematic aspects of this regime in the conditions of external shocks and the unfolding economic crisis.Methods. General scientific and empirical techniques and tools of economics, methods of analysis and synthesis, comparison, compilation and grouping are used.Results. The crisis indicates the need to build a monetary regime that would meet the interests of sustainable economic growth and social welfare. In Ukraine, there were no proper initial preconditions for the inflation targeting regime implementation. Therefore, adjusting the priorities of monetary policy in the crisis should reflect the gradual transition to a more flexible regime using monetary methods to support households and businesses, promote job creation, and stimulate aggregate demand.Prospects. Research of ways to increase the level of flexibility of monetary regulation, opportunities to expand the mandate of the central bank and improve the choice of optimal areas of influence on the economy with the help of monetary instruments at its disposal.

Russian Monetary Policy: Objectives, Instruments, and Rules

2008 ◽  
pp. 4-24 ◽  
Author(s):  
G. Fetisov
Keyword(s):  
Monetary Policy ◽  
Economic Development ◽  
Financial Crisis ◽  
Central Bank ◽  
Inflation Targeting ◽  
Governmental Regulation ◽  
Russian Economy ◽  
The World ◽  
Policy Objectives ◽  
Policy Problems

The article gives full treatment to monetary policy problems which are essential for the transition of the Russian economy to innovation-based development. The necessity for achieving all monetary policy objectives, instead of reducing them to inflation targeting, is justified. Systemic and structural approach to providing promotional monetary policy is suggested. The elaborated package of monetary policy tools allows ensuring higher efficiency of innovation-based economic development. Reasons for the relevance of the Central Bank of Russia discount rate decrease are given. Some general conclusions are drawn about new experience of governmental regulation under the conditions of the world financial crisis.

Monetary Policy Under Labour

2010 ◽  
Vol 212 ◽  
pp. R15-R33 ◽  
Author(s):  
Timothy Besley ◽  
Kevin Sheedy
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
Financial Markets ◽  
Conceptual Framework ◽  
Inflation Targeting ◽  
Banking System ◽  
The Face ◽  
The Uk ◽  
Monetary And Fiscal Policy

This paper analyses Labour's record on monetary policy and the record of the MPC which it created. The paper begins by discussing the conceptual framework and institutions behind inflation targeting as it operates in the UK. We then discuss the successes that it enjoyed up to 2007 and debate the lessons that are being learned as a consequence of the experience since then. We then raise some of the formidable challenges that UK monetary policy must now face up to including maintaining the credibility of the inflation targeting regime in the face of greater interdependence between monetary and fiscal policy, and between monetary policy and support to the banking system and financial markets.

The European Central Bank: the time is ripe for a major revision of its strategy

2021 ◽  
Vol 18 (2) ◽  
pp. 163-176
Author(s):  
Peter Bofinger
Keyword(s):  
Monetary Policy ◽  
European Central Bank ◽  
Inflation Targeting ◽  
Essential Element ◽  
The Public ◽  
European Central ◽  
Monetary Stability ◽  
Monetary Targeting ◽  
New Strategy ◽  
Policy Objectives

A revision of the European Central Bank's (ECB) strategy is urgently needed. For the new strategy, it is important to define the inflation target explicitly in symmetrical terms. Environmental policy objectives can in principle be reconciled with the ECB's mandate as long as they do not conflict with the objective of monetary stability. An essential element of any strategy is a heuristic that makes it relatively easy for the public to monitor whether monetary policy decisions are in line with the mandate. Among the possible heuristics, monetary targeting and the Taylor rule have to be ruled out while ‘inflation targeting’ offers a relatively simple navigation system for monetary policy discussions.

scholarly journals Communication as an instrument for enhancing trust in a central bank: the case of Ukraine

2019 ◽  
Vol 14 (2) ◽  
pp. 106-119 ◽  
Author(s):  
Yuliia Shapoval ◽  
Kateryna Anufriieva ◽  
Svitlana Brus ◽  
Yevhen Bublyk
Keyword(s):  
Monetary Policy ◽  
Exchange Rate ◽  
Central Bank ◽  
Financial Services ◽  
Inflation Targeting ◽  
Banking System ◽  
Communication Strategy ◽  
Necessary Condition ◽  
Communication Policy ◽  
Market Participants

The relevance of trust in the central bank is determined by the rapid growth of the gap between the expectations of a regulator and market participants regardless of the reforms carried out by the NBU. Therefore, the need to use the “non-traditional” monetary policy instruments has enhanced the role of verbal interventions in the context of inflation targeting. The aim of the article is to ground that trust causes adequate rational behavior of the market participants in response to the central bank’s communication policy. The type of this research is an explanatory research method. As determined, trust is the necessary condition for the effectiveness of the central bank’s communication strategy and it favors the achievement of proclaimed objectives. It is established that although since 2014 the NBU activated verbal interventions as an additional instrument to anchor expectations, the increase of transparency does not prompt the trust because of the lack of confidence of citizens in the NBU and high level of stress in the domestic financial sector. It is emphasized that the pursuit of inflation targeting requires expanded communication to gather the expectations of economic agents. The NBU, in its communication policy concerning the economic climate, underlines devaluation expectations, the exchange rate and explanations on the discount rate. However, the deviation of expected enterprises’ exchange rate from the actual exchange rate, growing velocity of money circulation against the declining share of funds involved in the banking system, low monetization level and low penetration of financial services evidence the distrust in monetary policy.

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