Halushka O. Competitive Currency Devaluation as a Form of New Protectionism in Current Global Economy.

New protectionism as a state policy aimed at ensuring сompetitiveness of the national economy in the global market is studied. Taking into account the world economy asymmetry, the factors of efficiency of currency devaluation are systematized depending on the role of the national economy in the world market and its level of development. The approach to classification of devaluations on the basis of its purpose is proposed, by which devaluations are classified as stabilization, defensive and competitive ones. The role of the exchange rate channel in the monetary policy transmission mechanism depending on the size of the national economy, its economic development and place in the international division of labor is assessed. Internal and external conditions of exchange rate channel efficiency are identified. Large economies are players in currency wars, while small economies are recipients of their consequences and shocks. Hybrid character of current currency war was determined. The tendencies of world monetary system development are analyzed, aim and results of the devaluation policies of the Federal Reserve System and the Bank of Japan as forms of new protectionism at the post-crisis stage of development are explored. The role of inflation targeting in monetary policy of the European Central Bank is identified. Peculiarities and prerequisites for the success of new protectionism policy of China are analyzed. China’s tools for reaching world hegemony are determined: accumulation of technology and knowledge through offshoring and establishment of joint ventures with Western companies, slow liberalization of capital flows, internationalization of the yuan by opening clearing banks in Europe, Asia and the Middle East, gradual transition to a floating exchange rate, granted status of a reserve currency for yuan, and others. The thesis on forced correlation of currency policies of small economies in line with currency fluctuations of their main trading partners is proved by analysing Kazakhstan and Belarus exchange rate policies and their interconnection with the Russian ruble devaluation. The correlation between hryvnia exchange rate and Ukraine’s balance of payments is analysed. The conditions under which Ukraine is recommended to adopt a flexible exchange rate are determined. The recommendations on the optimal monetary policy in Ukraine, as well as measures to be taken in related areas, for hryvnya devaluation to become competive are worked out.