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President Zelenskiy has appointed Tymofiy Mylovanov, president of the Kyiv School of Economics, to serve on the Supervisory Board of Ukroboronprom. During the first six months of the Zelenskiy presidency, Mylovanov, served as Economy Minister. Last fall, he returned to the government as an economic advisor to the President.
The National Anti-Corruption Bureau of Ukraine, or NABU, announced seven new suspects in an embezzlement case against wanted agro-tycoon Oleg Bakhmatyuk’s VAB Bank, the bureau’s press service . Six of the suspects used to work at the National Bank of Ukraine and one served as an intermediary who allegedly helped VAB Bank get a controversial UAH1.2bn ($45mn) stabilization loan in 2014. In total Bakhmatyuk has been accused of siphoning off some $1bn from his banks during the 2014-15 bank crisis a the time of the Revolution of Dignity and has fled the country. If convicted, the suspects face up to six years in prison and an Hr 17,000 ($620) fine. The list of suspects involved in the case now amounts to 17 people, including Bakhmatyuk.
Ukraine’s central bank welcomed a decision by the Bank of England on May 14 that it approved the “bail-in” of $595mn of loans that a British-based financial company made to PrivatBank before it was nationalized in 2016, Reuters reports. In a statement, the National Bank of Ukraine said the decision by Britain’s central bank bolstered Kyiv’s argument the nationalization had been carried out within the framework of a reliable legal procedure and complied with international standards.
The central bank does not want Ukrposhta to become Ukraine’s fifth state bank. Maybe the National Bank of Ukraine does not believe the government’s promises to privatize two of the state banks, Ukrgazbank and PrivatBank, within the next five years. But ideological purity is easy for free market economists living in central Kyiv, where every block has an ATM. But there are many Ukraines. There is the sparsely populated, rural Ukraine where people live in towns with less than 4,000 people – and no banks. I come from a town with a population of 4,500. Ukrposhta plans to acquire a bank, Igor Smelyanskiy, CEO of the state postal operator, wrote on Facebook. He said that “The acquired bank will be small, without branches or with a small number of them (we have 11,000 of our own) and, of course, without a portfolio of problem assets.” Smelyianskiy’s goal is to conclude talks with one of three target banks by the end of this year.
8.2 Central Bank policy rate
The National Bank of Ukraine (NBU) disclosed details of its April 14 decision to hike the key policy rate by 1.0pp to 7.5% in the minutes of its monetary policy committee meeting published on April 26. They revealed the decision was taken unanimously by all ten committee members.
The committee members noted that consumer inflation continued to accelerate faster than they expected. In March, annual consumer inflation reached 8.5% y/y, while January’s NBU forecast expected it at 7.6% y/y. On the one hand, the inflationary pressure was caused by temporary external factors (e.g. higher than expected global prices for energy resources and food). On the other hand, the fundamental inflation pressure was reinforced, as reflected by higher core inflation.
The committee members unanimously supported the decision to hike the key
52 UKRAINE Country Report XXXX 2018 www.intellinews.com