Rada to consider vote for central bank head in late February

Ukraine’s parliament (Verkhovna Rada) will most likely
vote to appoint the National Bank (NBU) head at its session starting Feb. 27,
Speaker Andriy Parubiy told a Feb. 5 press briefing. The president’s nomination
to the position, acting NBU Head Yakiv Smoliy, was approved by the
parliamentary banking and financial committee the same day. But besides the
committee approval, the candidate should be interviewed by each parliamentary
faction, Parubiy suggested.

The parliament’s factions will take “a couple of
days” to review Smoliy’s candidacy, the committee’s deputy head, Mykhaylo
Dovbenko of the Poroshenko Bloc, told Interfax-Ukraine. That’s in line with
Parubiy’s timeline that the vote for Smoliy’s approval will most likely occur
next session week.

Parubiy admitted in a closed meeting on Feb. 1 that
parliament has its simple majority of 226 votes to dismiss the current NBU head,
Valeriya Gontareva, but still lacks enough votes to support Smoliy’s candidacy,
according to the lb.ua news site, citing anonymous sources. 

Alexander Paraschiy: The
parliamentary factions conducting separate interviews with candidates for the
central bank head is not a necessary procedure. Such an initiative confirms
that so far there aren’t enough votes to support Smoliy. Even some MPs of the
president-aligned factions might be unhappy with the NBU’s current tough
monetary policy, which may also become an impediment to Smoliy’s approval. For
instance, the NBU’s Jan. 25 decision to raise the key rate by 1.5pp was heavily
criticized by PM Volodymyr Groisman last week.

Smoliy’s perosnal meetings with factions won’t necessarily
help him gain more support, so his approval will likely demand some concessions
from the president to certain parliamentary groups. All in all, Smoliy looks
like the most likely candidate to lead the NBU, and we believe that his
candidacy will be approved at the next session week in late February or early
March.