MONETARY POLICY OF NATIONALLY ROOTED ECONOMIC RECOVERY

Abstract

Introduction. The article examines institutional relations in the field of monetary policy as a tool for the development of a small open economy. The characteristic features of the implementation of institutional relations in small open economies at this stage determine the limited effectiveness of both monetary policy and financial mechanisms of economic development. The purpose of the article is to determine the factors that reduce the effectiveness of the national monetary policy, and the conditions for restoring its influence on economic growth.

Materials and methods. The study is based on a theoretical generalization of scientific and methodological approaches to the systematization of characteristic threats and factors of change in the concept of monetary regulation of the 21st century, quantitative analysis of empirical manifestations in the parameters of financial markets, synthesis of recommendations. for the modernization of monetary policy in small open economies. Statistical data of the National Bank of Ukraine and the World Bank for 2008-2023 were used for quantitative analysis.

Results and discussion. The phenomenon of credit stagnation against the backdrop of a rapid increase in bank liquidity is revealed. The significance of the level of savings as an endogenous source of investment resources is empirically substantiated. For small open economies, one of the significant consequences of attempts to adhere to the traditional approach of monetary policy has been the artificial restriction of credit activity from the point of view of a higher risk of devaluation. This requires a transition in monetary policy to a more national rooted regime. In the interests of sustainable economic development, the hierarchy of goals of the nationally rooted monetary policy should fulfill the following sequence of tasks: a) limiting the volatility of the exchange rate of the national currency; b) promoting the accumulation of domestic savings; c) formation of a mechanism for targeted redistribution of accumulated financial resources according to defined areas of structural innovation development of the economy.

Conclusion. The phased transition to national development in the monetary sphere should consist, on the one hand, in limiting the elasticity of the connection of the financial sector of the national economy with external shocks, and on the other hand, in increasing the ability to accumulate and use the accumulated capital in the interests of the structural development of the national economy.