Ukraine central bank head will resign, Ukraine media report

Valeria Gontareva, the head of the National Bank of Ukraine (NBU), is going to resign soon, two Ukrainian news sites reported in recent days. Gontareva has already informed the Ukrainian president and IMF managing director on her intention to resign, the dt.ua news site reported on Feb. 24. Also couple of media reported that she announced her decision to the NBU board.

Gontareva commented in the dt.ua article that she would officially announce her decision to leave one month in advance. This morning, the NBU press service reported officially that it does not confirm the resignation of Gontareva, also referring to the tradition of a one-month notice of any shifts in the NBU’s top management.

Among the reasons for her resignation are an expected slowdown in NBU reforms (after much being done in the last 2.5 years), the lack of support from the president and law enforcement agencies in her fight against the owners of failed banks, as well as lacking support for reforms from the government, the dt.ua news site reported.

Former Prime Minister Arseniy Yatsenyuk is the key candidate to succeed her, the dt.ua and rbc.ua news sites reported this weekend. But these reports also said that Yatsenyuk does not like the idea, as his ambitions are beyond that position. Among other possible candidates, the rbc.ua news site also identified possible successors as former Ukrainian president and NBU head Viktor Yushchenko, former NBU head  Volodymyr Stelmakh, Parliamentary Finances Committee Chair and MP Serhiy Rybalko, and Privatbank CEO Oleksandr Shlapak.

Alexander Paraschiy: Gontareva headed the NBU during Ukraine’s most difficult period in 2014, during which her team managed to stabilize the currency and prices, as well as conduct a wholesale cleansing of the banking system, something that haven’t done before. Indeed, any reforms in the near future are not going to be that dramatic so we share the view that it might be a good time to leave now.

On the other hand, recall that NBU head is among four Ukrainians who sign an IMF memorandum committing themselves to implementing reforms in the banking and financial sectors. Therefore, the possible rotation of the NBU head ahead of a possible signing of the latest IMF memorandum in coming weeks does not look optimal for Ukraine since it would cause instability and delays. So it’s possible that Gontareva be will allowed to leave, but in exchange for remaining for the next three months.

Gontareva’s possible resignation, amid a weak law enforcement system in Ukraine, could lead to a breakdown in prosecutions of the suspicious activity of the owners of failed mega-banks, most notably Oleg Bakhmatyuk (owner of Ukrlandfarming, UKRLAN), Kostyantyn Zhevago (owner of Ferrexpo, FXPOLN) and the former owners of Privatbank, led by Igor Kolomoisky and Gennady Bogolyubov.