The wartime action of the Ukrainian central bank has historical precedents
War situations have historically required the mobilization of central banks, whether to contribute to the solvency of States (Poast, 2015 ; Pamphili et Chambley, 2017), or later to ensure the liquidity of the banking system (Margairaz, 2019).
Since the establishment of inflation targeting regimes in the 1990s and the increasing internationalization of economies, the action of central banks at war has taken on a new light because they must maintain the internal and external autonomy of the monetary policy (Mundell, 1960). This is the case of the BNU, which has, thanks to the reforms undertaken from 2014, acquired a double autonomy and thus brought its monetary policy framework closer to that of the central banks of advanced countries: adoption of a floating exchange rate regime , inflation targeting, improvement of the degree of independence according to the index of Romelli (2022)increased transparency in the conduct of monetary policy (see Chart 1).
The action of the BNU since the Russian invasion therefore appears in different terms compared to the historical examples of central banks in times of war. This blog post thus looks at how the BNU was able to preserve its dual autonomy while supporting the war effort.
Figure 1. The BNU, a modern central bank (transparency index)
