ABSTRACT
This chapter examines various aspects of liberalization in Ukraine. Based on the observed performance of various markets in the economy, substantial liberalization has been achieved—markets clear and arbitrage possibilities have been largely eliminated. The economy’s performance may depend on the order in which markets are liberalized and institutions are created. The setting up and continued refinement of the institutions of the market economy—laws, regulations, and the implementation agencies that underpin private activity—are the chief tasks of transition to a market economy. Most commodity prices in Ukraine moved close to world levels in the second half of 1995, indicating that the international trading environment has become more liberal. In Ukraine, the greatest differential between cash and noncash exchange rates existed in 1993–94, during the multiple exchange rate regime, when the cash rates were many times higher than the noncash rates.
