Wave of Departures Rekindles Ukrainian Central Bank Tensions

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A new wave of departures at Ukraine's central bank revived tensions over decision-making under Governor Kyrylo Shevchenko, who was appointed last year by President Volodymyr Zelenskiy after his predecessor quit complaining of political pressure.

Licensing-department head Oleksandr Bevz, who was involved in the 2016 nationalization of the country's largest lender, said Wednesday on Facebook that he'd submitted his resignation along with eight colleagues because of what they called a lack of transparency and autonomy.

“Today, the National bank of Ukraine has deviated far from these standards,” Bevz wrote. “This threatens to roll back reforms in the banking sector and in regulation of the non-banking sector.”

Later, financial-stability department chief Vitaliy Vavryshchuk said he shared Bevz's views and announced that he was leaving too.

The news could dent Ukraine's hopes of restarting a $5 billion loan from the International Monetary Fund, which froze disbursements last year over fears central-bank independence was under threat following the resignation of the last governor, Yakiv Smoliy, and after the government failed to meet the program's conditions on time.

The IMF declined to comment on Wednesday's developments when contacted by text message.

The exits follow efforts earlier this week to amend legislation on the judiciary and tackling corruption to meet the Washington-based lender's requirements.

The central bank brushed off the criticism and scolded the public nature of the resignations.

“The licensing department has 107 employees and continues to operate as usual,” it said in a statement on its website. “A new head and chiefs of structural units will be selected in accordance with the law and procedures. An unconditional priority for the National Bank is to maintain a collegial approach to decision-making, in which differences in expert positions become the basis for professional discussions and new opportunities rather than public accusations.”

Read more: Ukrainian Central Banker Warns Revamp Risks ‘Substantial' Damage

But Bevz's remarks echo earlier comments by Dmytro Sologub and Kateryna Rozhkova -- the two remaining deputy governors who worked under Smoliy and who enjoy good standing among investors. They've criticized Shevchenko publicly and received official rebukes last year from the bank's council for violating internal procedures in giving interviews to local media.

Sologub is set to leave the bank when his term expires on July 12, while Rozhkova's runs until 2025.

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