Ukraine

Russia’s invasion of Ukraine continues to have a devastating social and economic impact on the country. Civilian casualties are mounting, over third population has been displaced, access basic needs such as electricity, water, heating at risk while winter is coming. Macroeconomic management exceedingly difficult. The fiscal deficit ballooned accommodate large expansion defense spending, financed by combination external support monetization, with multiple supplementary budgets since start war. inflation targeting regime was replaced hard peg US dollar, supported FX controls sizeable increase in policy interest rates. exchange rate come under episodic pressure (and devalued 25 percent July), despite sizable financing. Notwithstanding all these strains, authorities largely managed maintain macroeconomic financial stability, they committed take necessary measures preserve stability.