22:47 PM Friday, September 21, 2018
​Yakov Smoliy Emerges as Top Candidate for Central Bank Post
Media: President picks proven insider over bold banker from Raiffeisen Aval
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It seems that acting governor Yakiv Smoliy will finally be nominated by President Poroshenko next week - or at this is the line from well connected local media outlets.

Guess Lavrenchuk in the end was too independent/radical for Poroshenko. Smoliy has proven himself in office - a steady, trusted pair of hands. The consensus is that Smoliy will defend the reforms instigated by Valeriya Gontareva.

Out of Gontareva’s shadow: Yakov Smoliy (l) attended the press conference almost six months ago when Valeriya Gontareva announced her resignation as Governor of the National Bank of Ukraine (UNIAN/Inna Sokolovska)

But the deal is not done yet. So let’s see if Poroshenko does in fact nominate him, and if enough Rada votes are mustered to get rid of Gontareva and back Smoliy for the job. (This is assured, given that Valeriya was always given a torrid time in the Rada, given her typically straight talking approach). Smoliy seems to have better relations with the Rada.

Poroshenko delayed the hire for too long. It was becoming a credibility issue for him and for the NBU that he had not managed to nominate anyone for the job for SIX months. I think the IMF has also been pressing him to make up his mind. It will be one less pressure point with the IMF, which seems to have been none too pleased by being told back in April that Lavrenchuk was the man, only for this nomination to be stalled for so long.

Some might well claim that the Poroshenko administration is trying to play the IMF. The thinking goes: pass pension reform (or a version of it, which may not be in line with previous IMF promises) next week, plus get an NBU governor in place, and the IMF might cut them slack on politically difficult gas price hikes, and all the other stuff that has not been delivered from the 3rd review. Then do list on the 4th review (CORRUPTION).

Yakov Smoliy (r) presents new 20 hryvnia notes last year at the National Bank of Ukraine. (UNIAN/Vyacheslav Ryatinskiy)

I sense the IMF are appreciative of Smoliy, given that he has done a very credible job as acting governor. Athough the IMF still smarts over being "promised" Lavrenchuk at the time of the 3rd review. Not sure that the Lavrenchuk "promise" was a factor in the IMF cutting the Ukrainians so much slack on the 3rd review, given that so many structural benchmarks were missed last time around.

There are plenty of people at the IMF in DC with scars from previous engagements with Ukrainian policy makers. They have seen this negotiating game plan before. Let's see if the IMF has its own game plan.

Timothy Ash is senior sovereign strategist for emerging markets at BlueBay Asset Management in London.

Slider Photo: Yakov Smoliy came to the National Bank of Ukraine in 2014 as deputy governor, following over 10 years an an executive and investor in private banks in Kyiv. Here he spoke last March at a USAID-sponsored event, ‘Financial Sector Transformation.’ (UNIAN/Vyacheslav Ryatinskiy)

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