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2.0 Politics
2.1 INTERVIEW: Kyrylo Shevchenko, governor of the National Bank
of Ukraine
The National Bank of Ukraine (NBU), its clean up of the banking sector, and its prudent monetary policy, has been one of the outstanding success of Ukraine’s battle to drive through comprehensive reforms and put the country on track for sustainable growth and prosperity.
But Ukraine being Ukraine, the path is not straight and making changes is hard. Since the Revolution of Dignity in 2014 there have been three central bank governors and bne IntelliNews met with the latest, Kyrylo Shevchenko, who was appointed last summer for his first interview with the international press.
Since Shevchenko arrived on the job he went straight into crisis mode as Ukraine faced the double whammy of an oil price shock and the coronavirus (COVID-19) pandemic sweeping through the under-resourced country. At the same time he needed to maintain the reform momentum built up by his predecessor.
“Despite the heavy impact of the first lockdown, Ukraine weathered the crisis better than expected. The Ukrainian economy will return to steady growth starting in the second quarter. NBU expects that in 2021–2023, the economy will grow by about 4% annually,” Shevchenko said, speaking to bne IntelliNews by video link from the NBU headquarters on Instytutska street in central Kyiv.
A boom in commodity prices that started in about November brought much needed cash into the economy and has assuaged the impact of the 2020 crisis. Metal prices, a major export product, are at multiyear highs. And while Ukraine’s export of grain last marketing year , just ended, were down by 22% y/y to 43.4mn tons, global food prices were up 40% y/y more than compensating for the weaker harvest. This year the grain harvest is expected to be a good one.
In general, trade is going well and switched from perennial current account deficits to regular surpluses in the last year that are extending into this year as well, making the NBU’s life easier. The exports of goods was up by 16.7% y/y over the first four months of this year. Mining exports were up 85.4% y/y and metallurgical products up by 38.8% y/y leading to a positive current account surplus and growing gross international reserves that has caused the hryvnia to strengthen. Shevchenko has an economy on an upswing to work with.
Read the rest of this interview here.
2.2 Ukraine’s economy doing well, but $4.5bn funding hole looms
Ukraine’s economy has come through the coronacrisis in better shape than most were expecting and the economy is now growing and its hard currency reserves are adequate for the time being. A boom in commodity prices has
7 UKRAINE Country Report July 2021 www.intellinews.com