Ukraine set to fill central bank governor’s role after 8 months

Bloomberg

Ukrainian President Petro Poroshenko is set to propose a new central bank governor this week, filling a position that’s been vacant since May as the government struggles to get its $17.5 billion bailout back on track with the International Monetary Fund.
Poroshenko will reveal his nomination in the next two days, with parliament to vote on his proposal on Dec 21 after listening to a report from the previous governor, Valeriya Gontareva, according to a member of the president’s party. Names to have already been mentioned include Acting Governor Yakiv Smoliy and Volodymyr Lavrenchuk, chief executive officer of Raiffeisen Bank
International AG’s local unit.
The central bank has warned that stalled cooperation with the IMF is a threat to Ukraine’s financial stability, particularly with the nation’s recovery from a deep recession losing steam and resurgent inflation prompting a second interest-rate increase in less than two months last week. Gontareva, one of Ukraine’s most respected reformers, helped transform the former Soviet economy after a second pro-European revolution in 10 years.
“The fact that the situation with the central bank governor can be finally resolved is positive,” said Sergey Fursa, a bond trader at investment bank Dragon Capital in Kiev. “Both candidates who’ve been named as
potential new governors are respected
and will be positively welcomed by the banking community. But the key issue is preserving the independence of the regulator and thus political bargaining over
the post isn’t acceptable.”
Having initially strengthened, the hryvnia has lost ground since Gontareva’s departure as IMF transfers were halted. The currency is eastern Europe’s worst performer against the dollar this year with a 2 percent loss. It’s unclear when the next slice of IMF aid will arrive, with issues still to be reso-
lved including household natural gas prices and pension reform.