The document summarizes the monetary policy of Ukraine from 1991-2011 in 3 phases: 1) 1991-1996 focused on establishing a national monetary system and preparing for a national currency. Inflation reached 2100% in 1992 and 10,256% in 1993 while GDP declined. 2) 1996-1998 developed government bond markets to issue treasury bills and stabilize inflation. 3) 1999-2011 saw stabilization of the economy, reduction of inflation to 116.6% by 2007, and growth in real GDP and wages, though money supply and public debt increased which led to economic issues. Positive measures included stabilizing currency and inflation while mistakes included excessive money printing and delays in inflation control.

1. ECONOMIC ACHIEVEMENTS AND
PROBLEMS OF MONETARY POLICY
OF UKRAINE IN THE YEARS OF ITS
INDEPENDENCE (1991-2011)
Mykhailo Prokopiv

2. 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)

3. 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

4. Dynamics of the inflation rate
in 1992-1993 years
Year Value
1992 2100 %
1993 10 256 %

5. Dynamics of the real GDP
in 1992-1994 years
Year Value
1992 90.1 %
1994 77.1 %

6. Dynamics of the inflation rate
in 1994-1995 years
Year Value
1994 501 %
1995 282 %

7. 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)

8. The third phase
(January, 1999 - December, 2011) -
is characterized by the beginning
of the stabilization processes in the
real economy

9. 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

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

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

12. 180
160
140
120
Real GDP(%)
100
Real wages (%)
80
Inflation rate (%)
60 Money supply (%)
40
20
0
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Chart 1.1 Diagram of the main monetary and macroeconomic indicators

13. Positive measures :
 stabilization of the currency
 reducing inflation
 monetary stabilization policy
 supporting the purchasing power rate
 stabilizing financial markets.

14. 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

15. Thank you
for your attention