The Verkhovna Rada dismissed the head of the NBU Yakov Smoliy

Верховная Рада отправила в отставку главу НБУ Якова Смолия

This personnel decision was supported by 268 deputies.

Before retiring from his post Smoliy had the opportunity to speak before Parliament. The full text of the speech of the former head of the National Bank of Ukraine you can see below:

– Dear deputies!

I made the difficult but necessary decision to resign, because for a long time, the national Bank of Ukraine carried out a systematic political pressure. The pressure to make decisions that are not economically justified, that focus on simple short-term “victories” and could cost the Ukrainian economy and Ukraine in the longer term. As President of the National Bank, I more than two years standing guard over the institutional capacity of the Central Bank. Together with the members of the Board we are the shield that protects our technocratic and apolitical institution from the influences of politics. And the shield for the last years constantly trying to break. Pressure through the courts. Paid meetings at the College and under the houses of the members of the Board. Information attack, built on manipulation and lies. Undue political assessments of the NBU’s policy and directly to my work as head of the institution. The use of the NBU Council to create a corporate conflict inside the institution. These are all elements of one chain. This hinders the effective work of the Central Bank because the national Bank is not an island. Although some people are trying to equate the independence of the NBU with the desire to dissociate themselves from other state bodies, in reality we do not work in isolation. As well as the economy and financial markets. They depend not only on the policy of the NBU. They depend on the ability of all state institutions to find a common language. In this endeavor, and we in the NBU. However, the pressure is the opposite of effective dialogue. A conversation where one speaks professionally about the economy and Finance and the other hears only their political interests, is doomed to failure. My resignation means that the independence of the NBU managed to break?


This is a protest. It is a signal. It is a warning. It is a red line. His resignation I want to warn against further attempts to undermine the institutional framework of the Central Bank in Ukraine. Now the team of the Board and several thousands of professionals are working in the NBU to maintain macroeconomic and financial stability, institutional capacity of the Central Bank. However, it is crucial that their work ceased to interfere, to the President, the Government and politicians has finally established an efficient interaction with the Central Bank. Because the national Bank has done a lot for the development of the economy, financial markets and the welfare of Ukrainians. And a lot more can be done if he needs it. I focus only on what has been accomplished during my term at the head of the NBU from March 2018. We have finally conquered inflation. Every year, we have updated the records, bringing inflation to the optimum for the economy level. 2018 to 9.8%. 2019 – with 4.1%. Thanks to a consistent monetary policy we have achieved the inflation target of 5% +/- 1 percentage point faster than expected, and since then it remains low. Our ability to be consistent in achieving price stability, despite political cycles in the past year, the international community said the award edition of “global markets”. The discount rate for the first time in history of independent Ukraine was reduced to the level of 6%. Two years ago, when Parliament appointed me Chairman, the rate was 17%. Today we have a stimulating monetary policy aimed at reviving economic growth. We didn’t stop there and went on. We have introduced completely new tools to support the economy. Including loans funding for banks of up to 5 years, an interest rate swap for banks currency swap (swap is a financial trade transaction in the form of sharing various assets in which the conclusion of a contract for the purchase of securities, currency, accompanied by the conclusion of the transaction on the same product using a specific term on the same or different conditions – approx. ed.) with international organizations. We did odnoznachnye interest rates on loans a reality. Yes, it will take some time until low inflation and low interest rates will have an impact on the cost of credit. But it will happen. Of course, if the rights of creditors would be better protected, it would have been faster. However, it is beyond the competence of the NBU. We have strictly complied with the market flexible exchange rate while ensuring the stability of the hryvnia. Moreover, we worked on the development of the currency market. As a result, today the course is formed transparently at leading international venues, where all players participate anonymously. We were criticized for the strengthening of the hryvnia in the past year. They say, too passive, was the policy of the NBU in the currency market. However, last year we bought from the market for reserves, a record amount – 8 billion U.S. dollars. Yeah, if we bought more, we would not have heard the complaints of exporters. But we would have heard complaints from importers and most importantly – ordinary citizens who earn in local currency and spend in local currency. So, we keep balance and, as expected, the Central Bank, pursued a neutral policy, not flattering to any of the individual market participants. International reserves are another category where we annually update records. This time – highs. During my term of financial “safety cushion” of Ukraine increased by 10 billion USD from 18 to 28 billion US dollars. Last year Ukraine was popular among foreign investors. And although this is good help the government with funding, it was used as a pretext for criticism of the NBU. At the same time, our critics ignored the fact that last but not least, thanks to the inflow of currency from non-residents, our reserves were growing. Because of this, we are quite painless and quick coronavirus has experienced turbulence in the foreign exchange market in March. In 2019, we began large-scale currency liberalization. It was a real revolution that the Ukrainian business and citizens waited a quarter of a century. We have canceled nearly 40 foreign exchange restrictions, which hampered the development of business and investments and limited the right of Ukrainians to freedom of currency transactions. The banking system is healthy, marketable and profitable. From November 2018 was not derived any Bank from the market. All the owners of all banks known to the public. Due to this, the confidence in the banking sector is restored. Ukrainians “vote” for it with money when you carry them on deposits – from the beginning of 2018 hryvnia deposits of the population grew by half. Moreover, thanks to the tireless years of training banks to potential problems in the banking system entered coronaries strong as ever. Now it is an Outpost of financial stability and a lifeline for the economy. Cashless payments is becoming commonplace in the lives of Ukrainians. Thanks to the numerous initiatives of the NBU during my term, the share of non-cash payments among all transactions using payment cards increased from 39% to 55%. NBU has become more transparent and open. Today, the NBU policy is based on dialogue with banks and non-Bank financial institutions, business and expert community, international community, media and other partners and customers. Our achievements international professional financial community noted the prestigious award of “Central Banking Awards” in the category “Transparency”. It is very easy to cross. A step back to do much easier than the steps forward that we’ve been doing for years. I urge – don’t let this happen!

Give the National Bank the opportunity to retain the achievements of past reforms and provide new. Ahead of the National Bank still a lot of work. Don’t forget – coronaries continues. Need to maintain financial stability and to help Ukraine to restore economic growth without triggering a surge in prices. You must successfully finish the job. To complete foreign exchange liberalization, not harming hastily macro-financial stability. To make the market non-banking financial services, for which the national Bank became the regulator the day before yesterday, a healthy, transparent, customer-oriented and trustworthy. To protect the rights of consumers of financial services and improving financial literacy, the mandate which we received at the beginning of the year. To make financial services more accessible and to create comfortable conditions for the development of innovation in the financial sector. This and more is envisaged in the Strategy of financial sector development until 2025. That is the work of five years, if not more. And finally, I want to thank all the NBU and all of our partners and clients, who came with us on the way of reforms: it – market participants, business, expert and scientific community. In our discussions, was born the right decisions, and your support has inspired not to stop. Thanks to our like – minded MPs and peers in other government agencies that United front to advance the reform together with us. Thanks to our international partners and colleagues from other Central banks – you have supported us not only financially. First of all you have given us the knowledge and faith in us. Thank you to the journalists who patiently helped the NBU to become transparent and understandable. I am eternally grateful to the whole team of the National Bank – you have been my rock. All that reached the national Bank, we have achieved together. Thank you to all the Ukrainians, who trust the professionalism of the National Bank. Trust is for the Central bankers – most importantly recognition. Proud to have it. I leave the Bank national holistic Institute with a strategic vision, streamlined processes, strong professional team and a decent reputation among the leading Central banks of the world and the international community. I’m leaving with my head held high. Leave the NBU under your responsibility.

Prior to the appointment of the new head of the National Bank of Ukraine the duties of its head, will be fulfilled by the first Deputy Yakov Smoliy, Ekaterina Rozhkova.

Alexander Volovodenko

The Verkhovna Rada
The government