CONTROLLING INFLATION BY THE CENTRAL BANKS OF THE COUNTRIES OF THE WORLD: CURRENT EXPERIENCE

Abstract

One of the keys to economic recovery is low and predictable inflation. Success factors include the efficiency of financial markets, interaction with the government and the trust of citizens. In conditions of high inflation, economic processes in the country are distorted and slowed down. This is due to the inefficient allocation of resources, increased uncertainty, loss of confidence in the central bank, and, therefore, a decrease in the effectiveness of its policy of macroeconomic stabilization. The record acceleration of global inflation and the imbalance of inflation expectations in 2022 prompted central banks to move to tightening monetary policy to ensure price stability. In 2023, the world's leading central banks' struggle with inflation, which was caused by generous monetary support of economies during the pandemic, and intensified by the consequences of Russia's military aggression against Ukraine, continued. Special attention is paid to the challenges to central banks in the conditions of a new wave of inflation and an increased level of uncertainty due to the start of a major war between Russia and Ukraine, geo-economic fragmentation and disruption of supply chains. The balanced policy of central banks, aimed at maintaining control over inflationary processes, has gained special importance. The main steps taken by the National Bank of Ukraine during the period of active military operations to curb inflation, which amounted to almost 26% at the end of 2022 - beginning of 2023, are identified. Other countries faced similar economic problems, although the scale was certainly different. The experience of using the levers of monetary policy of the central banks of individual countries, in particular, Germany and Turkey, is interesting. It has been proven that, in addition to geopolitics, monetary policy continues to exert the most important influence on the world economy. The experience of the anti-crisis policy of the world's central banks proves the following. Even during crises, monetary policy has an impact on inflation. One of the goals of the NBU's current monetary policy is to reduce inflation in 2023-2025 and bring it to the level of 5% per year, which is an extremely ambitious and difficult task, especially considering Russia's military aggression against Ukraine.