Foto: Eugene Kozlovsky /

Strained independence and differences in the National Bank of Ukraine are showing, as Dmitro Sogolub leaves the bank.

The National Bank of Ukraine has been the center of attention for a while now. International partners have been looking at the developments with scepticism, as there is abundant fear that the NBU has taken a turn for the worse. Further worsening the situation is it, that the National Bank of Ukraine according to some onlookers have been a beacon of light in the fight against poor governance and corruption in Ukraine.

When the former governor Yakiv Smolii resigned from his post as the head of NBU citing political pressure, it worried people from both international organizations and the world of finance (Article was written in Danish). Following that, slowly but surely, members of the board were ushered out in favour of new board members which only deepened the distrust in the management.

As this summer drew close, NBU had only two members of the board left, who used to work under Smolii, and now, as feared, there is only one member left. Dmitro Sologub’s contract was not extended as it expired, and he is instead now going to work for the IMF in Washington, according to Ukraine Business News.

“Massive, massive loss to the NBU… Dima has become the point person for investors to understand the Ukraine macro story and how the NBU thinks about these things… It seems very much that the NBU will now move in a different direction with looser policy,” Timothy Ash writes, also quoted from UBN.

Policy changes?

The big question remains: Has the NBU lost it’s independence? And will this mean, that the policies of NBU will change? So far, there have not been many obvious changes in policy, but the recent spike in inflation gave reason to doubt the independence of NBU. As inflation soared, NBU did not change the interest rate to slow down the inflation. One of the concerned onlookers is CEO of SEB in Ukraine, Kristian Andersson.

“We don’t know much more now about the independence of NBU. My feeling is that NBU showed a bit of independence when they raised the central interest rate earlier this year from 6 to 6.5 percent, which was good. What I am afraid of now is that they will keep the central interest rate low with inflation too high,” said Andersson, but pointed out that he expects the National Bank of Ukraine to increase the key interest rate either on a meeting on July 22 or at the meeting later in September to combat the higher inflation.

The current inflation level of 9.5 percent in Ukraine is much higher than the seven percent target set by the beginning of 2021 for the year and the target of five percent inflation in the first half of 2022.