Ukrainian lawmakers are expected to confirm acting central bank chief Yakiv Smoliy as the permanent head of National Bank of Ukraine today. Smoliy was appointed interim chief after pro-reformist Governor Valeria Gontareva resigned in May.
Widely regarded as a safe choice and ally of President Petro Poroshenko, the incoming governor will continue to oversee the prescribed reforms under a $17 billion IMF rescue program. As part of the 2015 deal, Ukraine is required to float its currency, clean up its financial system and commit to reducing corruption.
Such anti-corruption reforms are crucial for Ukraine’s economic growth, partly because they make the country more attractive to investors. But with just half of the $17 billion program delivered to date, ensuring the full delivery of this program—which is contingent on successful anti-corruption efforts—is also crucial to Ukraine’s ability to refinance unsustainable debt and ward of economic volatility.
Despite his technocratic background then, anti-corruption reforms are a political hot potato that Mr Smoliy must contend with.
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Kai looks at security and political turbulence in the emerging market economies and also serves as a publisher with The Daily Brief.