Ukraine’s political turbulence is naturally causing volatility on the financial markets.
In a bid to keep relative
transparency and predictability to the country’s financial policy, Igor Sorkin, the current chairman of the
National Bank of Ukraine, is likely to stay put at least until the political
crisis blows over in a bit to keep stability – that is, assuming he’s not implicated in serious corruption.
However, even though the
position should be more technical than political, the prize could go to a pro-EuroMaidan
politician as a consolation prize in the new government.
After ex-President
Viktor Yanukovych’s government, the
economic situation in the country “is horrible,” stated Oleksandr
Turchynov, the newly appointed acting president and head of the Verkhovna Rada,
during the Feb. 23 parliamentary session.
The treasury account is
empty, he added. Besides, Turchynov criticized the central bank’s
ineffective policies.
On Feb. 22, members of the
parliamentary committee for finance and banking met with Sorkin.
“Members of the
committee expressed support for the recent regulatory activity of the National
Bank of Ukraine, aimed at stabilizing the situation on the monetary market.
They also assured that Verkhovna Rada of Ukraine with the involvement of the
committee is ready to support constructive propositions on providing stability
of Ukrainian currency and development of the banking system,” according to the NBU website.
Sorkin has been working
for the National Bank since 1996 and was appointed its governor on Jan. 11,
2013, after Serhiy Arbuzov left this position and became first deputy prime
minister in the Mykola Azarov’s Cabinet of Ministers.
During his chairmanship,
Sorkin has continued to implement Arbuzov’s tight monetary policy line, which included a fixed hryvnia rate
and complicated system of providing refinancing for the banks.
On Feb. 7, the central
bank under Sorkin introduced a more flexible exchange rate for the hryvnia at
what appeared to be an attempt to meet the lending requirements of the
International Monetary Fund. This became a significant liberalization of the
NBU’s monetary policy that will help Ukraine get back to the negotiating
table with the IMF for a new bailout loan to ease the risk of default.
On Feb. 22, IMF director
Christine Lagarde said that the fund is considering a financial lifeline for
Ukraine.
“Ukraine is a member
of the IMF. If Ukraine asks for help, economic or financial, we are ready to
provide it… But any discussion means there are at least two sides, and so far
the IMF does not know whom to talk to in Ukraine,” Lagarde said.
On Feb. 23, European
commissioner for economic affairs Olli Rehn said the European Union is also
ready to provide the financial help.
Sorkin, at least, can be
found in the country, while the location of many former government officials
remains unclear today.
Kyiv Post associate
business editor Ivan Verstyuk can be reached at [email protected]
