IMF: New NBU governor should continue policy of former leadership

Ukraine’s National Bank leadership pursued effective monetary and financial policy which should be continued under the new governor.

"We consider that the NBU leadership and staff effectively implemented a prudent monetary and financial policy, and it is important that this policy be continued under the new governor," IMF Resident Representative in Ukraine Goesta Ljungman said in an interview with Liga media outlet.

According to him, Ukraine had created a system ensuring the independence of the central bank in accordance with the best international practices in 2015. This system has served Ukraine well and contributed to rapid economic recovery and growth, Ljungman said.

However, he noted, for this model to work, the central bank must feel confident that it can make difficult but necessary decisions without politically motivated consequences, that the political establishment will defend the central bank's independence when its actions are questioned, and that the independence of the central bank will be respected to the letter and by the spirit of law.

"Everyone should be concerned about the fact that the NBU leadership openly says it is subjected to political pressure," the IMF Resident Representative in Ukraine said.

As reported, on July 1, Governor of the National Bank of Ukraine Yakiv Smolii filed a letter of resignation to the President due to "systematic political pressure."

In turn, the President's Office assured that the NBU board would continue its activities based upon the principles of independence and professionalism, adding that "ensuring the independence of the National Bank of Ukraine remains an unconditional priority."

On July 2, President Volodymyr Zelensky submitted a motion to dismiss Smolii from the post of NBU Governor to the Verkhovna Rada. The Verkhovna Rada Committee on Finance, Tax and Customs Policy supported the draft resolution on the dismissal of Smolii.

On July 3, the Verkhovna Rada of Ukraine dismissed Yakiv Smolii from the post of the Governor of the National Bank of Ukraine.

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