As international experience

As the international experience, an important prerequisite for effective regulation of the monetary market is the coordination of fiscal and monetary policy. One of its manifestations is the support of the Government of the Central Bank to ensure price stability, including through the creation of prerequisites for effective regulation of the monetary market by leveling the negative impact on the process of debt and fiscal policy. Lack of consistency in the government and monetary policy significantly reduces the effectiveness of central bank as a regulator of the monetary market and actually brings them to the quantitative regulation by eliminating the negative impact of the liquidity factors, especially the unpredictable flow of funds in the government accounts at the central bank. An important factor influencing self reserves (liquidity) in Ukraine is also a balance sheet item NBU "Cash in circulation." Demand for cash varies according to changes in nominal GDP, interest rates (the effect of opportunity cost) of non-cash payment systems (cash substitutes), expectations and confidence in the banking system and the central bank, the level of dollarization in the country. From a position of influence on the liquidity of the central banks are exploring the components of cash in circulation as cash on hand and cash outside banks. The first is the growth factor to increase liquidity, while the increase in cash out of banks causes its decline. The trend towards a rapid increase in the volume of cash outside banks indicates the propensity of market participants to preserve the assets out of banks, and shadowing of the economy requires the adoption of appropriate measures and financial deepening detenizatsii Category: Liquidity of the banking system of Ukraine | Tags: international experience