ECONOMIC ACHIEVEMENTS AND

PROBLEMS OF MONETARY POLICY OF UKRAINE IN

THE YEARS OF ITS INDEPENDENCE (1991-

2011)Mykhailo Prokopiv

The ways of monetary development can be divided into 3 stages :

The first phase (1991-1996 years)

The second phase (1996-1998 years)

The third phase ( 1999 – 2011 years)

The first phase (1991-1996 years) -

is characterized by the creation of the national monetary system based on

the introduction of the ruble into circulation and the Ukrainian

preparations for the introduction of the national currency into circulation

Dynamics of the inflation rate

in 1992-1993 years Year Value1992 2100 %1993 10 256 %

Dynamics of the real GDPin 1992-1994 years

Year Value1992 90.1 %1994 77.1 %

Dynamics of the inflation rate

in 1994-1995 years Year Value1994 501 %1995 282 %

The second phase (1996-1998) –

is characterized by the development of the stock market

of government securities (GS), which were issued in the form of

T-bills (government bonds)

The third phase (January, 1999 -

December, 2011) - is characterized by the

beginning of the stabilization processes in the real

economy

Year Real GDP(%) Real wages (%) Inflation rate (%) Money supply (%)

1999 99,8 103,4 119,2 140,5

2000 105,9 103,6 125,8 146,1

2001 109,1 120,4 106,1 141,9

2002 105,2 115,6 99,4 141,8

2003 109,6 113,8 108,2 146,5

2004 112,1 120,8 112,3 132,4

2005 102,7 131,5 110,3 154,3

2006 107,3 111,7 111,6 134,5

2007 107,6 110,3 116,6 151,7

2008 102,3 107,2 122,3 130,2

2009 85,2 90,0 112,3 94,5

2010 104,2 110,2 109,1 121,4

2011 105,4 108,6 111,3 116,8

Table 1.1 Dynamics of monetary and macroeconomic indicators in Ukraine

In 2001 inflation rate was 6.1 % per year and the real GDP grew by 9.1 %

During 2000-2006 the ratio of banking sector credit to GDP increased from 12.4 % to 30 %

Chart 1.1 Diagram of the main monetary and macroeconomic indicators

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 20110

20

40

60

80

100

120

140

160

180

Real GDP(%)

Real wages (%)

Inflation rate (%)

Money supply (%)

Positive measures :

stabilization of the currency

reducing inflation

monetary stabilization policy

supporting the purchasing power rate

stabilizing financial markets.

Mistakes: the growth of money supply emission

delaying the measures to rein in inflation

using bonds as a major source of financing the

budget deficit

reducing the surplus trade balance

slowdown in GDP growth

the imbalance of public finances

Thank you for your

attention