EFFECT OF A MONETARY POLICY TRANSMISSION MECHANISM ON CREDIT AND INVESTMENT PROCESSES IN UKRAINE

Abstract

Abstract. The article examines the impact of the main indicators of the monetary sphere on capital investments. Considerable attention is paid to the analysis of analytical consolidated balance sheets of the central and commercial banks of Ukraine. Based on the compiled balance sheets, an overview of the monetary sphere is made and factors of influence on broad money are analyzed. The absence of a tendency to reduce interest rates on loans is demonstrated, despite the decrease in inflation and the increase in the money supply. It is inferred that a cardinal increase in the reserve ratio has a negative effect on the money multiplication indicator. The impact of changes in the structure of lending and deposits on the state and confidence in the country's banking system is shown. The article reflects the change in the ratio of depository corporations' assets towards the external sector. It is revealed that foreign assets of the central bank have become decisive in the hierarchy of factors of influence on broad money. The increase in financing of the state budget deficit at the expense of the monetary component is shown. The level of monetization of the national economy is analyzed and the lag of the dynamics of broad money from the dynamics of GDP is indicated. As a result, recommendations were developed to stimulate investment processes through the activation of the monetary transmission mechanism. The author recommended reorienting the Central Bank's monetary strategy from exclusively supporting inflation targeting and supporting of financial system stability to lending to the real sector by encouraging banks to lower lending rates. To this end, the need to reduce the discount rate and interest on certificates of deposit with the formation of part of the required reserves in certificates and loans for capital investments is emphasized. The possibilities of further research on this topic are considered in the direction of studying the impact of changes in interest rates on the investment decisions of economic entities, as well as the creation of a non-governmental, non-profit advisory organization to conduct objective knowledge on economic research.