Presidential candidate Volodymyr Zelenskiy’s team is sending contradictory messages after a representative of the candidate called for an additional audit of the National Bank of Ukraine. Such a move could potentially send negative signals to foreign financial institutions.
On April 15, Oleksandr Danylyuk, Ukraine’s former finance minister and currently one of the main advisors to Zelenskiy, said that he doesn’t see the need to additionally audit the National Bank of Ukraine, or NBU.
But this message contradicts what a Zelenskiy representative said three days earlier.
During an April 13 political forum in the Parkovy Exhibition Center, Dmytro Razumkov, a political consultant to Zelenskiy, said that, if elected, the comedian-turned-politician would most likely question the head of the NBU, Yakiv Smolii, and perform an audit of the institution’s work due to the slow pace of reforms. Officials could be dismissed after the audit, Razumkov added.
Zelenskiy is currently leading the polls in the upcoming presidential runoff, set to take place on April 21.
Economic and political experts have questioned Razumkov’s statement, since the NBU is considered to already be an independent institution. The president does not have the authority to perform institutional audits and directly fire NBU officials.
The presidential administration’s power is limited to appointing half of the bank’s board members, with the other half being chosen by the parliament. The president also proposes the head of the bank, but this individual must be approved by the parliament.
Serhiy Fursa, an investment banker at Dragon Capital, wrote in an opinion piece on the Novoye Vremya news site that the seemingly harmless proposal of an additional audit of the NBU is a step backwards that would again place Ukraine’s main financial institution under political control.
“The NBU is the loudest example of the success of reforms in Ukraine, and the independence of the regulator is a clear signal of the opportunity to invest,” wrote Fursa.
Ruslan Chornyi, managing partner at Financial Club, a banking market research firm, stated that Razumkov’s comments show that he lacks information about how the NBU works.
“Each year, in April, an independent audit by one of the Big Four audit companies is performed after which an independent supervisory board is appointed,” said Chornyi, adding that there is no need for another audit.
Danylyuk, who was invited to speak on behalf of Zelesnkiy on the ICTV channel’s political talk show “Svoboda Slova” (“Freedon of Speech” in Ukrainian), did not answer a question on whether Zelenskiy’s team has a unified position on auditing the NBU. However, he said that he doesn’t see any need to intervene in the work of an independent financial institution.
“We understand that the (NBU) is an independent institution, and that it’s a big achievement that the National Bank became independent,” Danylyuk said.
It is now much less dependent on political decisions than it was five years ago, he added.
Alexander Paraschiy, research director at the Concorde Capital investment firm, told the Kyiv Post that an additional audit of the NBU is not written into the law. Paraschiy suggests that the proposed audit is most likely Razumkov’s personal opinion, but may also reflect Zelenskiy’s desire to appoint his own people to the NBU.
Changes to the NBU board would be quite likely under Zelenskiy, he added.
“Obviously, Danylyuk is more competent in these matters, and I hope that he will be able to defend his opinion before Zelenskiy,” Paraschiy wrote in a message to the Kyiv Post, adding that there are concerns about the inconsistency of the Zelenskiy team’s statements.
International financial institutions and experts have hailed Ukraine’s central bank reform as one of the country’s top achievements over the past five years.
