THE EFFECTIVENESS OF THE FUNCTIONING OF THE INTEREST RATE CHANNEL OF MONETARY TRANSMISSION IN UKRAINE

Abstract

Ensuring a high level of monetary regulation of the economy and improving the efficiency of the central bank's monetary policy largely depend on how effective is the mechanisms of transmission of monetary impulses from the decisions of monetary authorities to market participants through the use of monetary transmission. Given that in the current environment, interest rate policy is the main component of the monetary policy of the vast majority of central banks, interest rate channel is important in the process of monetary transmission. This is also due to the fact that in the monetary transmission system, the interest channel is most closely linked to the mechanisms of functioning of monetary, credit and currency channels. Solving this problem requires the identification the role of the interest channel in the mechanism of monetary transmission, the peculiarities of its function in current conditions, revealing clear causal links and the basic principles of the systematic regularity of monetary development. In addition, it is necessary to identify clear criteria and methods for assessing the effectiveness of the channel, as well as systems and indicators, which allow the use of several parameters in the flow of interest to the channel on the basis of monetary and macroeconomic indicators. The conducted research is based on the statistics of the National Bank of Ukraine for 2005-2020, the system of economic-statistical and economic-mathematical methods, as well as on the calculation of indicators, and is characterize the reliability of models. Quantitative assessment of the efficiency and operating conditions of the interest rate channel of the monetary transmission mechanism should be based on the basic principles of monetary theory and a reliable statistical base. This suggests ways to improve the efficiency of the interest rate channel through the central bank's interest rate policy, adequate money market conditions, and prudent government borrowing policies in the domestic market to ensure efficient transmission of monetary impulses from the central bank to the real sector of the economy. The results of the study can be used to substantiate the forecast parameters of monetary indicators of the monetary policy of the National Bank of Ukraine (NBU) and the conditions of effective functioning of the interest rate channel of monetary transmission in Ukraine in the medium term.