Ukrainian Central Bank Governor Said to Be Seeking to Resign

(Bloomberg) -- Ukraine’s central bank governor is seeking to step down, having grown disappointed with the government’s lack of progress on reforms, according to a person familiar with the matter.

Valeriya Gontareva believes she’s achieved all she can in her post and has told President Petro Poroshenko of her intention to resign, the person said Monday. The Dzerkalo Tyzhnya newspaper reported Feb. 25 that Gontareva is seeking to quit, without saying where it got the information. Presidential spokesman Svyatoslav Tsegolko declined to comment “on rumors.”

Gontareva, 52, helped Ukraine stem a plunge in its currency and rebuild foreign reserves as a second revolution in 10 years and fighting with Russia-backed insurgents ravaged the ex-Soviet economy. She’s since allowed the currency to float freely and tamed inflation that had ballooned beyond 60 percent. A change in the central bank’s leadership would further jeopardize reform efforts, with delays continuing to hamper transfers from a $17.5 billion international bailout.

“She’s clearly part of the team that pulled Ukraine out of the economic crisis at the most difficult of times,” said Simon Quijano-Evans, London-based chief emerging-market strategist at Commerzbank AG. “It would really be up to the rest of the team of macro policy makers to demonstrate that any change at the helm of the central bank doesn’t affect the reform program.”

Of particular concern to Gontareva is inaction on overhauling law enforcement and the judiciary, hampering her desire that crooked bank executives face prosecution, according to the person familiar with her thinking. The governor led a crackdown on lenders that largely served the interests of their oligarch owners, shutting down more than 80 and culminating with Ukraine’s biggest, Privatbank, in December.

She’d favor Raiffeisen Bank Aval Chief Executive Volodymyr Lavrenchuk or Alfa Bank adviser Roman Shpek to replace her. Lavrenchuk wasn’t available for comment, while Shpek said he doesn’t plan to change his current job. Ex-Prime Minister Arseniy Yatsenyuk was offered the job, but isn’t interested, a party ally said Monday, declining to say who made the approach.

The hryvnia was 0.5 percent weaker at 4:04 p.m. in Kiev, trimming this year’s gain to 0.8 percent against the dollar. The government’s dollar-denominated notes due September 2027 declined, lifting the yield by eight basis points to a three-week high of 8.77 percent.

Selected by Poroshenko in June 2014, Gontareva is less than halfway through her seven-year term. Under Ukrainian legislation, the president nominates the central bank governor and their candidacy must then receive parliamentary approval.

To contact the reporters on this story: Volodymyr Verbyany in Kiev at vverbyany1@bloomberg.net, Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net.

To contact the editors responsible for this story: Andrea Dudik at adudik@bloomberg.net, Andrew Langley, Paul Abelsky