After Washington, Viktor Yushchenko’s Stock Also Rises in Kyiv

Monday before last at a Cabinet session Leonid Kuchma, the main unmasker of “incorrect” National Bank behavior, showed another example of how “systematic” he is and suddenly tempered justice with mercy, pointing out that the National Bank had acted professionally. NBU Governor Viktor Yushchenko’s chair, which had recently seemed shaky, looked firm.

“A drastic turn in appraisals of National Bank’s activities is unlikely to be linked to Yushchenko’s statement in which he rejected the accusations of the NBU being short-sighted in conducting its monetary policy,” a People’s Deputy told The Day. “The IMF most likely gave a signal not to Yushchenko. Otherwise, there can be no other explanation of how all those accusation in a strange way coincided with the recent government visit to IMF headquarters.”

Another source close to the government put it differently: “The National Bank along with its Governor have gotten lashed out at ‘just in case.’ In reality people in Ukraine and Washington are aware of the fact that should Yushchenko step down an emission would become unavoidable. The President himself is not interested in replacing the NBU Governor because otherwise the whole responsibility placed on the most popular Ukrainian banker Yushchenko will descend onto his shoulders.”

“Temporary suspension by the IMF of its previous demand that Ukraine introduce a flexible exchange rate can be regarded as unofficial support of Yushchenko as an adherent of currency corridor,” a source in the National Bank told The Day.

Today, the National Bank and the government are getting ready to host in late October an IMF mission and promise to preserve the current currency corridor. However, as we were able to learn at the Cabinet of Ministers the next-year-budget indicators had been corrected taking into account an exchange rate of Hr 3.60 to 4 to the US dollar.