Shevchenko elected NBU governor

Ukraine’s parliament voted on July 16 to approve
Kyrylo Shevchenko, the CEO of state-controlled Ukrgazbank, as the new governor
of the National Bank (NBU). His nomination, submitted by the president, drew
332 votes, compared to 226 needed. Shevchenko has 25 years of experience in the
banking and financial sector, spending the last five years as Ukrgazbank CEO.
In remarks to the finance committee before he was nominated, Shevchenko said
that his key priority will be to support the stability of the Ukrainian
currency. He also told MPs that the key goal that President Zelensky set for
him is to strengthen the institutional independence of the NBU.

Alexander Paraschiy: Unlike his
predecessor Yakiv Smoliy, who specialized on banking IT, Shevchenko has more
experience in finance itself. This, as well as his deep management experience,
could make him a more effective NBU governor. The key question, however, is in
which spheres will Shevchenko direct his skills and knowledge, and whether he
will be able to preserve the NBU’s independence from
political pressure and desires of elites. In particular, it’s not clear whether
Shevchenko will be able to withstand expected pressure from the cabinet and the
president to radically ease monetary policy, or even weaken the national
currency.

Shevchenko looks to be the most “independent” of
all the discussed candidates that were
considered to be potentially dependent on political elites. Therefore, we believe his candidacy will barely
satisfy the IMF, which is encouraging for Ukraine’s short-term financial
stability. Based on this expectation, it looks likely that Ukraine will be able
to return soon to the international debt markets. Time will tell whether
Shevchenko’s monetary policy will prove to be independent.