Kyrylo Shevchenko, a Bloomberg-owned central bank governor, unexpectedly resigned, citing health reasons as the country struggles to fend off Russia's invasion and to stabilize an economy devastated by war.
According to a statement posted on Tuesday by the central bank, Shevchenko submitted his resignation letter to President Volodymyr Zelenskiy. His departure is subject to the approval of the parliament. When the assembly accepts it, his first deputy, Kateryna Rozhkova, will take over as acting governor, according to the bank's press office.
Shevchenko made a difficult decision for myself due to health-related reasons, which I cannot ignore.
Shevchenko said that the central bank board will continue to perform its functions and manage the activities of the National Bank until his resignation is completed. His departure comes as International Monetary Fund officials prepare to assess the country's financial needs later this month. Ukraine wants to get a large-scale loan program from the lender apart from the $1.3 billion in a single unconditional disbursement that the IMF is considering.
It is not a tragedy for the National Bank of Ukraine, as Shevchenko hasn't proven himself in this post, but it is worth paying tribute to him for not yielding the central bank's independence, said Oleksandr Parashchiy, research director at Kyiv-based Concorde Capital.
A new governor can be appointed quickly if the president's support is strong in parliament, he said. The president s servant of the People party Andriy Gerus said that Parliament is going to debate Shevchenko's resignation on Thursday.
The central bank hiked interest rates to 25% in June citing the shift in the fundamental parameters of the country's economy during the war. It had to devalue the hryvnia, calling it a 25% correction in July to protect its foreign-currency reserves.
The bank has flagged a pause in monetary tightening until at least the second quarter of 2024 as long as the impact of war doesn't deviate from their expectations.
Ukraine was forced to ask investors to defer all payments due to its eurobonds for a period of 24 months and to amend the payment terms on its GDP-linked securities.
The 49-year-old Shevchenko has led the central bank since July 2020 and was criticized by Zelenskiy and the IMF in the early days of his tenure after the loss of key staff from the central bank. The monetary authority has played a key role in supporting the wartime economy after Russia invaded on February 24.
His predecessor, Yakiv Smoliy, resigned in the middle of 2020, citing political pressure to lower interest rates.
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