THE REGIME OF DIRECT INFLATION TARGETING IN THE MONETARY POLICY OF THE NBU: APPLICATION AND EVALUATION EXPERIENCE

Abstract

Monetary policy, as an integral component of state economic policy, plays a key role in ensuring macro-stability, necessary levels of inflation and stability of exchange rates. All this is oriented to the relevant monetary program of the CB, that is, in Ukraine, to the main principles of the monetary policy of the NBU. Monetary theory and practice has a long history of theoretical discussions and practical developments, it has undergone significant changes over the past thirty years, but the monetary policy of the NBU with the regime of direct inflation targeting continues today to a large extent to follow the dogmas of monetarism of the end of the 20th century. More than thirty years of experience with the direct inflation targeting regime has provided extremely important experience and considerable empirical material for evaluating its effectiveness in a large number of countries, both developed and emerging markets. These assessments are too contradictory, ambiguous, even opposite, and the main thing is that they all insist on taking into account the specifics of the country, the institutional environment, the structure of the economy, etc. The institutional specificity of Ukraine's economy, its structural problems, absolute openness, significant inflationary potential due to the dominance of non-monetary factors of inflation emphasize the problematic nature of choosing the priority goal of monetary policy - inflation targeting. The applied methods and the obtained consequences of price targeting to reduce inflation are extremely negative, significantly ambiguous, making it impossible to maintain a low and stable level of inflation under the conditions of a floating exchange rate. In Ukraine, it is extremely necessary to abandon strict adherence to the postulates of inflation targeting and move to the implementation of a discretionary monetary policy with a wider set of target guidelines.