Moreover, the tight monetary conditions were among reasons for the strengthening of the hryvnia. High global prices for exported goods, a record harvest of grain crops, and a substantial amount of remittances also contributed to the stronger hryvnia. In addition to monetary factors, an increase in the domestic food supply and lower global prices for food products dampened inflationary pressures.
Nonetheless, the largely unregulated global markets do clear and, with rare exceptions, appear to move effortlessly from one state of equilibrium to another. It is as though an international version of Adam Smith’s “invisible hand” is at work. One key aspect of the recent globalization process is the apparent persistent rise in the dispersion of current account balances.