KIEV: Ukraine’s IMF-backed central bank chief Valeria Gontareva submitted her resignation on Monday after coming under intense pressure from tycoons and lawmakers who wanted to throw her in jail.
The decision, which had been anticipated, leaves one of crisis-hit Ukraine’s most transparent and respected institutions rudderless and President Petro Poroshenko with a tough decision to make about the central bank’s fate.
“I voluntarily submitted my resignation to the president of Ukraine effective May 10,” the 52-year-old former private banker and Western financial darling told reporters.
She added that her successor would likely come under heavy attack and wished whoever was appointed the best of luck.
“There will be political pressure on anyone who has this job. For this reason, I would like to tell my successor: be strong,” she said.
“I believe that my mission has been fully accomplished,” Gontareva added. “Reforms have been fulfilled.”
Gontareva was lauded by economists and the West for cleaning up Ukraine’s murky financial sector in which many banks functioned as little more than the private purses of a select group of powerful billionaires.
But she became a lightning rod of criticism for her liberal policies from the oligarch-controlled media outlets that dominate the troubled former Soviet state.
The most strident populist voices in parliament even suggested that Gontareva be locked up for following International Monetary Fund advice and easing artificial state support for the value of the hryvnia national currency.
The resulting devaluation from 12 to 27 hryvnias to the dollar from the day of her appointment in June 2014 to Monday slashed the value of people’s savings and fed inflation that reached almost 50 percent that year.
But it also saved the central bank from running out of money and boosted the war-torn country’s financial standing with Western sovereign lenders such as the IMF and the European Union.
“Gontareva will be a tough act to follow,” Bluebay Asset Management economist Timothy Ash wrote in the Kyiv Post English-language weekly.
“I tend to think that history will judge Gontareva relatively well for the reforms she instigated at the (central bank) and in the banking sector more generally.”
Gontareva managed to shut down 88 out of the country’s 180 banks during her term.
The targeted lenders became known as “zombie banks” which Gontareva herself described as the “private banks of the oligarchs.”
“Many were heavily involved in criminality,” she wrote in The Wall Street Journal. “Some were simply funding vehicles for shareholder businesses. Others stole customer deposits.”
One of Gontareva’s signature achievements involved the state takeover of Ukraine’s largest private bank.
PrivatBank was owned by Igor Kolomoyskiy—a politically powerful billionaire who became an early target of Poroshenko’s uphill fight against corruption.
Gontareva later discovered that 97 percent of PrivatBank’s corporate loans went to companies owned by Kolomoyskiy and another shareholder.
She said the systemically important bank’s failure would have jeopardised the deposits of about half of Ukraine’s population of around 40 million people.