DT: Honcharova is leaving, Poroshenko offers her position to Yatsenyuk

DT: Honcharova is leaving, Poroshenko offers her position to Yatsenyuk

According to sources of the newspaper Dzerkalo Tyzhnia. Ukraina, Valeria Honcharova has indeed been preparing to leave the post of NBU chair, and this time — seriously.

As the editor and commentator of that weekly, Yurii Skolotianyi, writes, "she informed President Petro Poroshenko of her firm intention to do this after her vacation ended in early January of this year, and she was persistent — a second conversation on the subject took place in Davos."

"Ms. Honcharova also notified IMF Managing Director Christine Lagarde of her intention during a visit to the U.S. capital that took place in mid-February, which the National Bank tried not to publicize.

Moreover, this week Honcharova supposedly already announced her intention to her deputies at the NBU. True, there are no official confirmations of this either from Honcharova herself or from the press service of the National Bank of Ukraine," the article states.

During a brief phone conversation Valeria Honcharova commented on the situation as follows:

"If a decision on resignation is made, I will announce it, as I already promised you earlier, publicly at least a month before I leave the position, as, for example, the first deputy head of the NBU, Oleksandr Pysaruk, who worked on our team, did. For now I am working very actively and am currently on a working visit to Brussels, where I will deliver a report on the experience of the grand cleansing and reform of the banking system that we implemented in Ukraine. Which, unfortunately, is not appreciated and is criticized here, but is ready to be studied and adopted abroad," she added.

When asked for clarification, "then why was the intention already announced to her deputies, and if so, does the public not have the right to be informed as well?", Valeria Oleksiivna asked to leave that without comment.

According to Dzerkalo Tyzhnia. Ukraina, "the conversation Honcharova had with her deputies is in fact more accurately called an informational conversation than an official announcement that could be considered the starting point between the moment of announcement and the act of relinquishing authority."

"And yes, this is not Honcharova's first statement of intent to leave, but whereas before it was more like manifestations of some political game, now her decision really is firm. And there are a number of reasons for this," Skolotianyi states.

One of those reasons DT cites is that, in Honcharova's view, she is not receiving proper support from the country's top officials and, consequently, from law enforcement agencies. Thus, materials on all 11 episodes for which the National Bank appealed to the Prosecutor General's Office have been sitting there practically motionless, and a personal meeting between V. Honcharova and Yurii Lutsenko did not help correct the situation.

In addition, Honcharova believes the current government does not appear capable of carrying out real reforms.

Another factor: the main indicator of the financial system's condition for broad segments of the population — the hryvnia exchange rate against the dollar — is currently relatively stable. Moreover, in the week ending, its strengthening was noted, which resulted in a fall in not only the buy but also the sell quotes for the dollar at nonbank exchange points to 27 UAH. And if an IMF tranche is released, it can be expected to favorably affect the foreign exchange market in the coming months, and the NBU's gold and foreign currency reserves will equal or even exceed the level at which Honcharova took over the National Bank from her predecessor Stepan Kubiv (about 17 billion dollars, whereas as of the end of January this year it was 15,4 billion). Furthermore, inflation is not as big a problem as before (after the peak of 43,3% in 2015, last year it slowed to 12,4%, and for the current year it is forecast to fall to 9,1%).

One can also consider the main stage of the "cleaning" of the banking system — one of Honcharova's chief priorities (if not the main one) announced during her tenure as head of the National Bank — to be complete. Especially after the nationalization of PrivatBank, which became a kind of crowning achievement of this process. All of this are signs of positives that, however, can very quickly dissipate in the future. For example, once there is an understanding that the impatiently awaited IMF tranche was the last one, and gold and foreign currency reserves begin to rapidly melt again against the backdrop of upcoming debt payments. The exchange rate will also find it difficult to continue strengthening, because we should not forget that the current account deficit of the balance of payments began to grow again from last year (to 3,4 billion dollars, or 3,6% of GDP, by the end of 2016 — against the backdrop of continuing export declines and a recovery in import growth).

"Moreover, it is becoming increasingly obvious that the tariff increase on electricity from 1 March of this year is unlikely to be the last, and the same applies to heat and gas supply tariffs. Therefore, inflation in the country will continue to rise for reasons beyond the NBU's monetary efforts. And finally, society will still have to sort out the details and realize all the 'charms' and true cost of the PrivatBank nationalization variant that was chosen at the NBU's suggestion in December last year (without the factual participation of the former owners). From this very selective list of negative factors alone, the medium-term outlook does not look very rosy. So now is the time for Honcharova to leave at the peak of upward trends that are unlikely to be long-lasting," DT writes.

According to the publication, President Poroshenko is already prepared for personnel reshuffles at the NBU.

"His priority candidate is Arsenii Yatseniuk, whom the guarantor would like to 'incline toward cohabitation' in the National Bank. The problem is only that the candidate himself has somewhat different, higher ambitions: he sees himself as prime minister after the scheduled parliamentary elections. The current almost zero rating of the ex-premier does not bother him, since by that time his 'negative portfolio' will have been somewhat forgotten, and the wealthiest resources he accumulated as a presidential shareholder in 'Ltd-Ukraine' will prove sufficient to count on repeating the electoral success of 2014 year. After all, one should not forget that, despite losses felt recently, many of Yatseniuk's protégés remain in top positions not only in a number of ministries and agencies but also in the largest state monopolies. The coalition though."

Such a resourceful and ambitious player, and moreover on his 'own' electoral turf, is definitely not needed by Poroshenko. In this regard it would indeed be more advantageous for him to send Yatseniuk 'into political exile at the National Bank,' no matter how significant that position is in terms of resources. Having sufficient competence to keep the situation at least relatively under control, the ex-premier at the NBU would inevitably become a lightning rod for public negativity with all the electoral prospects that entails. And if he fails, he will be definitively buried there along with all his illusory plans to return to the prime minister's chair."

For the president, Yatseniuk is important as a negotiator whom the IMF accepts. If Honcharova leaves, only Finance Minister Aivaras Danyliuk will remain, who, God forbid, could slam the door and leave the government, with whom it is extremely difficult to find common ground. In addition, Yatseniuk not only advises Volodymyr Groysman but can block a vote on his dismissal if the president, who constantly hurls thunderbolts at his fellow countryman, decides to replace the current prime minister. In the NBU chair Yatseniuk is doomed to become a PR opponent of the head of the Cabinet.

According to DT.UA, Yatseniuk's first reaction was to refuse the presidential offer. However, Poroshenko's team continues to insist. Moreover, Yatseniuk's own team strongly recommends not refusing — in lean times such a position cannot be let go 'from home.' Arsenii Yatseniuk is thinking. He has time: formally Honcharova's month has not yet begun," Skolotianyi notes.