On Friday, the Ukrainian parliament approved the resignation of the head of the central bank. Jakiv Smolij resigned two days ago on the grounds that he was facing systematic political pressure. 286 deputies voted in favor of the resolution approving the banker’s appeal, ie more than the required majority, the northern Ukraine said true.
Unlucky resignation, according to Reuters, frightened markets and raised questions about Ukraine’s determination to persevere in reforms.
Smolij said in front of deputies that he had resigned in protest of political pressure on the bank, including paid demonstrations, pressure from the courts and the media. On a note from a member of parliament, whether he faced pressure from the president, he said he did not say so, but all meetings with the head of state, deputies or the prime minister called for money, to abolish the principles of regulating the banking system and set exchange rates favorable to exporters.
Smolij, respected in business circles and in the West, became the head of the central bank two years ago. According to the media, three possible successors are now being considered. President Volodymyr Zelensky consulted with the central bank management and market participants on this issue.
The central bank complained that it was under pressure due to its decision in 2016 to nationalize Ukraine’s largest bank, PrivatBank, billionaire Ihor Kolomojsky. According to Reuters, the banker’s resignation has raised concerns among Western supporters of Ukraine about the credibility of the government’s reform program under President Zelenský, a former comedian who won the election last year with promises to eradicate corruption.
According to the AFP agency, the leadership of the central bank is the target of attacks by some deputies from the President’s party Servant of the Nation, especially from some legislators considered close to the oligarch Kolomojský. These deputies drafted a resolution accusing the central bank of artificially worsening the economic crisis.
The document was criticized by ambassadors of countries associated in the G7 group, according to which the attack on the independence of the central bank will destroy investor confidence and jeopardize Kiev’s international aid. The independence of the central bank is also a key condition for the International Monetary Fund, which last month provided Ukraine with $ 2.1 billion (about 50 billion crowns) under a new aid package of $ 5 billion.
The Ukrainian government on Thursday tried to reassure investors that its reform program is well on its way after being forced to cancel the sale of $ 1.75 billion (about 41.4 billion crowns) of Eurobonds due to the shocking resignation of the head of the central bank.