Ukrainian Central Bank Chief Resigns, Cites 'Political Pressure'

7/1/20
KYIV -- The governor of Ukraine's central bank, Yakiv Smoliy, says he is resigning because of “systematic political pressure that denied fulfillment” of his duties. Smoliy announced on Twitter on July 1 he had submitted his resignation to President Volodymyr Zelenskiy. "Let it be a warning for attempts to undermine institutional independence of the central bank," he wrote. Zelenskiy's office said in a statement that ensuring the National Bank of Ukraine's (NBU) independence remained its priority, and that the bank and the government should continue to implement prudent monetary and fiscal policies. The NBU has previously complained of being subjected to pressure, including over its decision in 2016 to nationalize Ukraine's largest lender, PrivatBank.

Smoliy has been the head of the NBU since March 2018. Under his leadership, the bank has kept its reputation among investors as a respected institution that managed to bring down inflation. His announcement comes as the country's economy is expected to contract by around 5 percent this year due to the coronavirus pandemic. If Zelenskiy accepts the resignation, experts said it could derail an 18-month, $5 billion loan program approved by the International Monetary Fund (IMF) last month to help Ukraine cope with the economic fallout of the pandemic. “The NBU is the most trusted institution among foreign institutional investors. Terrible news for Ukraine. The future of the IMF program must be in doubt. Who succeeds Smoliy will be critical,” Timothy Ash at Blue Bay Asset Management tweeted.

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