National Bank of Ukraine governor says bank experienced no pressure in 2 years of his tenure
MOSCOW. Oct 16 (Interfax) - The National Bank of Ukraine (NBU) remains independent amid the crisis, which helps it to perform successfully, NBU Governor Andrei Pyshny, who was appointed to the job on October 7, 2022, said in an interview with Ukrainian media.
"I haven't felt any pressure or the need to somehow point out that the National Bank is an independent institution over these two years. The NBU's independence is a goal and a resource, because it helps build an absolutely different level of confidence about our policy," Pyshny said.
While everyone is under pressure of circumstances produced by the crisis these days, the NBU team manages to remain efficient enough in pursuing a policy of interaction and open dialogue, explaining its position, and making all stakeholders aware of the importance of preserving the NBU's institutional independence as a common resource, Pyshny said.
He said he spends a lot of time on communications, horizontal diplomacy, and explaining the National Bank's position.
"Perhaps I even feel about some things that it's not enough. Then I start doing more, because if you've explained your position and substantiated it, then at least you've responded preemptively to possible risks," he said.
As an example of his achievements, Pyshny mentioned the fact that the domestic debt market rather than money issuance was used as a source of financing Ukraine's defense needs in 2023-2024.
He also referred to reports of some media outlets that, ahead of a recent visit of an International Monetary Fund mission to Ukraine, international partners pressured the NBU to further devaluate the Ukrainian national currently. He admitted that, as part of IMF missions, the parties discuss the dynamics of different macroeconomic indicators, including the budget deficit and the exchange rate.
"We model alternative baseline scenarios and look at the situation. Because such missions are an opportunity for us to take advantage of [the IMF's] expertise and stress-test our vision. But does anyone except the National Bank determine the exchange rate policy? No, this is the NBU's exclusive responsibility," he said.
However, amid a crisis, it is important "to understand as clearly as possible that you don't function in a vacuum and that an ivory tower is impossible in principle," he said.
Pyshny said he still managed to maintain an efficient dialogue with Finance Minister Sergei Marchenko from day one, which has helped review some approaches and thus restore the domestic debt market and not to finance the budget deficit through money issuance.
"I do hope this will continue to be so, despite new challenges such as a growing budget deficit," Pyshny said.
Commenting on a difference between the NBU's and the Finance Ministry's positions as to whether retroactively increasing the banks' profit tax to 50% from 25% in 2024 was an appropriate thing to do, Pyshny said he understood the finance minister's clear reasoning that it was the only way to have a package of tax amendments passed by the parliament.
At the same time, the NBU agreed to differ with the Finance Ministry, insisting that the tax raise was undesirable and defending its position for as long as possible, he said.
"We remain very open to dialogue. Is it necessary to discuss something? Let's do it. Is it necessary to substantiate something? Let's do it. But we reserve the right to say no. Or to say: Not now. Or to say: Let's do that in a different way, which actually won't create extra risks. And that's how it works, step by step," he said.
The NBU is mandated to maintain price and financial stability and support the economy, its important component being independence, which is clearly stipulated by the law on the NBU, and saying that it should be reconsidered now would be inappropriate, he said.
