CURRENCY IMBALANCES AND THEIR IMPACT ON UKRAINIAN BANKING SYSTEM
In this article, the author analyzes the main internal factors, which influence the exchange rates and thus the currency risk in the banking system of Ukraine. The total Ukrainian banks’ foreign exchange position is long, which means that the total amount of loans in foreign currency is larger than the total amount of deposits. It means that banks will earn money in case the value of grivna decreases. Whilst it might be beneficial for some banks, it could be the source of credit risk, because borrowers may face some difficulties making their loan payments. Ukrainian banks use operations in the interbank foreign exchange market and the stock market in order to manage their foreign currency position.
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Keywords: banking system, currency position, currency risk, exchange rate, foreign exchange market, hedging. |
BANK OPERATIONS
Ostapchuk Yaroslav
PhD
Yaremko Artur
PhD, Associate Professor
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