CURRENCY OPTIONS FOR UKRAINE

A sound monetary/exchange rate policy is a key ingredient of successful economic development, particularly in the case of the formerly Communist transition economies of Eastern Europe. This paper analyzes monetary/exchange rate policy in Ukraine. It presents the development of such policy throughout the 1990s, and analyzes the present policy regime and its strengths and weaknesses. The paper also compares the Ukrainian experience to a variety of exchange rate regimes practiced by numerous transition economies in Central and Eastern Europe, and argues that countries that selected more fixed exchange rate regimes demonstrated better economic performance than those that selected more flexible regimes. Finally, I propose alternative policy options that could help Ukraine to further stabilize its economy and improve its macroeconomic performance.