TRANSFORMATION OF MONETARY INSTITUTIONS AND POLICY CREDIBILITY IN UKRAINE: RETROSPECTIVE ANALYSIS
TRANSFORMATION OF MONETARY INSTITUTIONS AND POLICY CREDIBILITY IN UKRAINE: RETROSPECTIVE ANALYSIS

Summary/Abstract: There is a growing recognition that monetary institutions and their design in a particular country serve as one of the determinants of macroeconomic stability. The paper aims to reflect on how institutions become a foundation for policy credibility and how policy expectations (credibility pressures from domestic and external actors) influence development and the design of monetary institutions. Credibility of institutions is discussed as being based on confidence that institutions will perform according to the commonly accepted model (reputation, knowledge-based trust) as well as confidence based on the positive long-term communication. The research focuses on the development of institutional foundations of monetary policy in Ukraine, recent policy changes and their reasoning within the credibility framework. Consequently, the author discusses how such measures as exchange rate regime, price stability objective, central bank independence, transparency and accountability become a foundation of monetary policy credibility in Ukraine.

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