Bodnar Olena, PhD (Economics), Associate Professor of the Department of Finance, Banking and Insurance, Mykolayiv National Agrarian University, Mykolayiv, Ukraine

ORCID ID: 0000-0002-0152-4290
e-mail: bodnaroa@mnau.edu.ua

Snidko Yelyzaveta, applicant higher education, Mykolayiv National Agrarian University, Mykolaiv, Ukraine

ORCID ID: 0009-0002-5300-4956
e-mail: snidkolizon@gmail.com

The Effect of Inflation on Lending during Martial Law

Abstract. Introduction. The article examines the effect of inflation on the process of lending in times of martial law. It is noted that armed conflicts lead to a complex economic situation, which affects the level of inflation and the functioning of the banking system.

Purpose. The main objective is to uncover the mechanisms of interaction between inflation and credit in the conditions of a military conflict. We aim to identify the main influences of these factors on the economy and provide recommendations for ensuring financial stability.

Results. The research confirms that a state of war significantly increases the risk of inflation, leading to an escalation in the cost of credit. The high level of prices makes it difficult for businesses and citizens to access credit. It is also found that currency depreciation worsens the ability to repay external loans.

Conclusions. The article emphasizes the need for effective economic regulation during a state of war. In particular, it is crucial to develop policies aimed at reducing inflation and supporting financial stability, ensuring the availability of credit to support economic activity in crisis conditions.

Keywords: inflation; lending; martial law; bank; interest rate; institution; borrower; creditor.

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