The NBU overtake completed: third member of the NBU Board removed

UKRAINE - In Brief 31 Jul 2020 by Dmytro Boyarchuk
I was overoptimistic assuming the new NBU Governor Kyrylo Shevchenko will take a pause before totally removing the old team from the NBU. Ukraine placed Eurobonds successfully. As a consequence, tension eased and Shevchenko promptly moved on with cleaning the Central bank from pro-reformist people. Today, on July 31st the NBU Council dismissed one more Deputy Head of the NBU Serhiy Kholod, allegedly on his voluntarily request. From now the old pro-reformist team lost majority of votes at the NBU Board. Recall, the NBU Board consists of six members with the Head of the NBU keeping the casting vote. Put it different, you need two loyal members of the Board and the Head of the NBU to pass needed decisions. Other members of the Board could stay on place if they are ready to legitimize any moves of the new team. After Kyrylo Shevchenko appoints new loyal deputy, he will be able to rebuild the NBU activities according to his own agenda which still remains unclear. To make matters worse, few days ago media wrote about dismissal of the chief lawyer of the NBU. Probably, I may look an alarmist but after removal of the chief lawyer prospects of law cases on Privatbank are under big question. What’s next? Very likely, Deputy Head Kateryna Rozhkova and Dmytro Solohub will resign soon. Otherwise their presence will legitimize decisions of the new NBU management. In the meantime, Kyrylo Shevchenko is expected to add some monetary stimuli and to help the budget with deficit financing. Hopeful, we will have more clarity on his plans over the upcoming weeks.

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