Ukraine central banker says government made job ‘impossible’

KIEV (AFP) – Ukraine’s outgoing central bank governor Yakiv Smoliy on Friday accused the country’s leadership of pressuring him to make economically unjustified decisions as lawmakers approved his resignation.

The bank governor quit on Wednesday, saying “systematic political pressure” made it “impossible” for him to fulfil his duties.

In an angry speech in Parliament on Friday, he said the central bank faced pressure to make “economically unreasonable decisions” that “could cost the Ukrainian economy and Ukraine dear in the longer term”.

He accused President Volodymyr Zelensky along with lawmakers and the prime minister of pushing for “uncontrolled printing of money for the government”.

He said he was told to let inflation rise and the national currency devalue to benefit exporters.

“This is a line that no central bank will cross,” he said.

The National Bank of Ukraine in Kyiv. PHOTO: KYIV POST

He told lawmakers of his resignation: “This is a protest, this is a signal, this is a warning, this is a red line.”

A total of 286 MPs backed Smoliy’s resignation, enough to approve it.

The International Monetary Fund (IMF) and the international business community have expressed deep concern at Smoliy’s departure.

The IMF praised Smoliy’s leadership of the central bank, stressing the need to preserve its independence after he leaves.

The European Union (EU) said Smoliy’s resignation “against the backdrop of alleged political pressure sends a worrying signal”.

Groups representing the western business community – the European Business Association and the American Chamber of Commerce – also voiced alarm at the move.

Following Smoliy’s resignation, Ukraine’s Finance Ministry cancelled a previously announced Eurobond offering. In June the IMF unblocked USD2.1 billion worth of aid under a new USD5 billion plan to help Ukraine.

Zelensky has already held consultations with the leadership of the central bank on selecting a new governor.