Ukraine’s Central Bank governor announced his resignation on Wednesday citing “systematic political pressure” and casting doubt over a rescue deal with the International Monetary Fund (IMF).
“I’ve submitted my resignation appeal to the President,” Yakiv Smolii wrote on Twitter.
“This decision has been taken as an answer to systematic political pressure that denied fulfillment of my duties as Governor. Let it be a warning for attempts to undermine institutional independence of the central bank,” he added.
In a separate statement, members of the central bank’s board shared Smolii’s “warnings about systematic political pressure”.
“The Board calls on the President, the Government and politicians to cooperate effectively with the central bank and to enable the National bank to perform the functions assigned to the central bank by the Constitution of Ukraine,” they added.
President Volodymyr Zelenskiy has not yet commented on the resignation.
Ambassadors from G7 countries in Ukraine stressed in a joint statement in response to the resignation that “an independent National Bank is a foundational achievement for Ukraine that has reduced corruption, driven growth and rescued a failed banking sector.”
“To undermine this crucial institution would be a big step back and jeopardise the credibility of and support for Ukraine’s reforms,” they said.
They had already raised concerns last month about a parliamentary draft resolution into the National Bank’s (NBU) activities submitted by MPs from Zelenskiy’s party, Servant of the People.
Smolii’s resignation comes less than a month after the IMF agreed a $5 billion (€4.4 billion) bailout of the country to mitigate the impact of the COVID-19 pandemic on the Ukrainian economy. Just above $2 billion have already been handed out to Ukraine.
The money is also meant to go towards policies to ensure continued central bank independence with IMG managing director Kristalina Georgieva saying that the NBU “has skillfully managed policy during a very challenging period” and that “Central Bank independence should be preserved”.
The private sector is now worried that the bailout programme may be in jeopardy.
Andy Hunter, president of the American Chamber of Commerce in Ukraine, told the Kyiv Post that “Smolii was hugely respected among the community” and that his resignation “comes at a bad time with Ukraine looking at an 8.2 per cent gross domestic product decline.”
“Businesses are now concerned about the future independence of the national bank management and the continuation of the IMF programme,” he added.