Ukrainian President Plans to Replace Central Bank Governor
(Bloomberg) -- Ukrainian President Volodymyr Zelenskiy wants to replace central bank Governor Kyrylo Shevchenko, according to three people familiar with his plans.
Zelenskiy isn’t happy with Shevchenko’s performance, the people said, asking not to be named as the matter isn’t public. The governor has fallen out with some of the bank’s senior executives, triggering a wave of resignations that unnerved Western donors including the International Monetary Fund.
To dismiss him, Zelenskiy must provide grounds and needs approval from parliament, where his Servant of the People party controls a majority of seats. But finding someone who lawmakers will confirm could be tricky. Zelenskiy has twice failed to have the head of the state-run oil and natural gas company approved as energy minister.
Zelenskiy’s office dismissed talk of a change at the top of the central bank as a “rumor,” saying there’ll only be an official statement if there’s any decision to replace Shevchenko. The bank said it has “a lot of important assignments ahead” and its team “continues to work on their implementation.”
Ukrainian assets retreated following the news. The government’s dollar bonds due 2033 fell, pushing yields up 18 basis points, while warrants linked to the country’s economic growth ended a five-day winning streak.
Shevchenko, 48, has defended the staffing turnover he’s overseen, saying the main thing is policy continuity.
He was only appointed by Zelenskiy last year, arriving after his predecessor quit citing political pressure to lower interest rates. Under his stewardship, the central bank was among Europe’s first to tighten monetary policy in the face of what’s become the continent’s second-fastest inflation behind Turkey. It’s delivered four rate hikes in 2021.
Zelenskiy is in the midst of sweeping changes as the coronavirus pandemic persists. He’s already pushed out parliament’s speaker and is set to revamp the cabinet too.
He wants to find a replacement for Shevchenko before suggesting that lawmakers dismiss him, a person close to the president’s office said. The search for candidates is being led by Zelenskiy’s chief of staff, Andriy Yermak, and there’s no indication yet when the process will be completed, the person said.
News of Zelenskiy’s plans to fire Shevchenko comes as an IMF mission assesses Ukraine’s efforts to unfreeze a $5 billion aid program. One of the remaining conditions is passage of legislation to safeguard central-bank independence.
©2021 Bloomberg L.P.