Foto: Emil Filtenborg

The governor of the National Bank of Ukraine says that the sale will come soon, and he has confidence that Ukraine is heading in the right direction. 

Ukraine is facing current difficulties with rising tensions with Russia, problems with the IMF loan, and a spike in Covid-cases. However, Kyrylo Shevchenko, the governor of the National Bank of Ukraine, says to the media Global Capital that he is confident that Ukraine will get through the current difficulties. Recently, inflation has increased to 8,5 percent, higher than forecasted, but Shevchenko is confident that it will soon turn again. 

“The inflation trend will gradually reverse as new harvest supplies come to the market and the effect of a low comparison base fades for some products. If, in April, inflationary pressures increase by more than we expect, we are ready to tighten our monetary policy more decisively in order to ease underlying inflationary pressures, stabilize expectations, and bring inflation to the target,” said Shevchenko and added that the most significant uncertainty at the moment is the Covid-19 situation and its impact on GDP. 

Shevchenko also added that he is confident that Ukraine will deliver a stable hryvnia with a value around the current exchange rate of 28 hryvnias to an American dollar. He also denied that political wishes are controlling the National Bank of Ukraine. Yakiv Smoliy was governor before Shevchenko, and he left his job last summer, claiming that political pressure was preventing him from doing his job. 

PrivatBank will be privatised

Global Capital asked Shevchenko what measures he would use to support the Ukrainian economy over the next few years. Among other things, he said that Ukraine’s largest bank, PrivatBank, which is owned by the state, will be put up for sale “soon.” 

He hopes that it “will draw the interest of the most prestigious international investors, including from the US and the EU.” He added that PrivatBank holds 20 percent of the Ukrainian banking market.

“We hope that in five years, the state’s share of the banking market will have fallen from 55 percent to 25 percent. This process will assist the Ukrainian banking system gain greater independence and promote the banks’ operation according to market-driven principles,” he added and said that the sale of PrivatBank is an integral part of this. 

The banking sector is still at risk

Shevchenko pointed out that he is optimistic about the future of the Ukrainian economy and the banking sector, but he said that there are several challenges ahead. He pointed out that despite what everyone is trying to do, the Covid-19 situation remains uncertain. 

“Economic recovery will be constrained this year by Covid-19 and strengthening of lockdown restrictions,” he said, “In January, we projected that in 2021 the Ukrainian economy would make up for losses from the coronavirus crisis and grow by four percent in 2022-2023”

“We are ready to combine the tools used for financial system support in order to mitigate the crisis trends. We are also monitoring the risks; namely, escalation of the military conflict in the east of Ukraine, volatility in the global capital markets, and a sharper worsening of the terms of trade,” Shevchenko pointed out.