Ukraine's central banker chief steps down citing pressure

Posted 7/2/20

KYIV, Ukraine (AP) — Ukraine's president on Thursday accepted the resignation of the country's top banker, who has complained of political pressure.

National Bank head Yakiv Smolii cited …

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Ukraine's central banker chief steps down citing pressure

Posted

KYIV, Ukraine (AP) — Ukraine's president on Thursday accepted the resignation of the country's top banker, who has complained of political pressure.

National Bank head Yakiv Smolii cited “systematic political pressure” as the reason for his decision to step down, but didn't provide any specifics.

President Volodymyr Zelenskiy accepted Smolii's resignation and asked lawmakers to endorse the decision.

Smolii was named the acting National Bank head in May 2017 and then was appointed firmly to the job by parliament in March 2018 under Zelenskiy's predecessor, Petro Poroshenko.

Members of Zelenskiy's Servant of the People party, which dominates parliament, have criticized the National Bank, arguing that its rigid policies have hurt the economy and stymied growth.

Smolii's resignation follows the International Monetary Fund's approval of a $5-billion loan package for Ukraine intended to help it cope with the consequences of the coronavirus pandemic. The Ukrainian economy is expected to shrink by 5% because of the outbreak.

In the wake of Smolii's resignation, Ukraine's Finance Ministry cancelled a planned offering of dollar-denominated bonds.

The ambassadors of the Group of Seven leading developed nations responded to Smolii's resignation by emphasizing the crucial importance of the National Bank's independence.

“An independent National Bank is a foundational achievement for Ukraine that has reduced corruption, driven growth and rescued a failed banking sector," they said in a statement on Twitter. "To undermine this crucial institution would be a big step back and jeopardize the credibility of and support for Ukraine‘s reforms.”

The European Union noted that the National Bank has served Ukraine well by stabilizing the currency, reducing inflation and increasing foreign reserves, adding that Smolii's resignation “sends a worrying signal.”

“Establishing a strong and independent National Bank has been a fundamental achievement for Ukraine, and remains crucial to the country’s future success,” it said in a statement.

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