National Bank governor fighting for hryvna, and his own reputation
ian bankers on Thursday looked to their central bank chief to protect them from the fall-out.
Viktor Yushchenko, chairman of the National Bank of Ukraine, is no stranger to his role as the defender of the country's fragile young economy.
In May, when Russian markets were in turmoil, Yushchenko talked the market out of panicking. 'We will not allow the Russian crisis onto the Ukrainian market,' he said.
The 43-year-old banker came under fire from one jealous parliamentary deputy for his 'film star' looks and is Ukraine's most trusted official – especially among women.
Two years ago the tall, dark bank chief was named 'Mr. Ukraine.' The introduction of the hryvna currency, masterminded by Yushchenko in 1996, is seen as a major achievement of the Ukrainian government after the previous karbovanets currency was ravaged by hyperinflation. Yushchenko, believed by many to have presidential ambitions, has staked his name on the hryvna.
'To have a strong currency, that is what the head of the central bank would like to modestly claim as his achievement,' he said in an interview with Reuters in January.
'A weak currency and runaway prices mean the country is not being true to its citizens,' he said.
But the avid cook, gardener and restorer of Ukrainian churches has little with which to defend the currency. On his own admission, Yushchenko has only $1.1 billion in reserves with which to protect the hryvna.
But right now, Yushchenko is virtually all the Ukrainian market has.
'Many of our clients are very positive about Yushchenko,' said Ihor Mazepa of brokers Prospect Investments in Kyiv. 'He has authority.'
His trademark moves are to be cool and slow. When Russian interest rates were moving up and down by hundreds of percent, Yushchenko nudged up Ukraine's own rates only a few points.
While promising not to interfere with interbank dollar trade this week, Yushchenko has suspended dollar trade for several hours almost daily.
'The central bank understands that the ruble's fall will hit the hryvna and they are trying to do everything they can to keep the hryvna within the currency corridor,' said one currency dealer at a major Ukrainian bank.
'If the hryvna doesn't slip out of the corridor, it will strengthen on the interbank market,' he said.
But the nervous market is looking for more from Yushchenko.
'Certainly, Yushchenko's promises can calm some commercial clients but it is high time to take some decisive steps,' said Valeria Hontareva, financial director at French-owned bank Societe Generale.
'He should not keep people on the edge of their nerves,' she said.
As the Russian crisis threatened to spiral out of control, Ukrainian bankers on Thursday looked to their central bank chief to protect them from the fall-out.
Viktor Yushchenko, chairman of the National Bank of Ukraine, is no stranger to his role as the defender of the country's fragile young economy.
In May, when Russian markets were in turmoil, Yushchenko talked the market out of panicking. 'We will not allow the Russian crisis onto the Ukrainian market,' he said.
The 43-year-old banker came under fire from one jealous parliamentary deputy for his 'film star' looks and is Ukraine's most trusted official – especially among women.
Two years ago the tall, dark bank chief was named 'Mr. Ukraine.' The introduction of the hryvna currency, masterminded by Yushchenko in 1996, is seen as a major achievement of the Ukrainian government after the previous karbovanets currency was ravaged by hyperinflation. Yushchenko, believed by many to have presidential ambitions, has staked his name on the hryvna.
'To have a strong currency, that is what the head of the central bank would like to modestly claim as his achievement,' he said in an interview with Reuters in January.
'A weak currency and runaway prices mean the country is not being true to its citizens,' he said.
But the avid cook, gardener and restorer of Ukrainian churches has little with which to defend the currency. On his own admission, Yushchenko has only $1.1 billion in reserves with which to protect the hryvna.
But right now, Yushchenko is virtually all the Ukrainian market has.
'Many of our clients are very positive about Yushchenko,' said Ihor Mazepa of brokers Prospect Investments in Kyiv. 'He has authority.'
His trademark moves are to be cool and slow. When Russian interest rates were moving up and down by hundreds of percent, Yushchenko nudged up Ukraine's own rates only a few points.
While promising not to interfere with interbank dollar trade this week, Yushchenko has suspended dollar trade for several hours almost daily.
'The central bank understands that the ruble's fall will hit the hryvna and they are trying to do everything they can to keep the hryvna within the currency corridor,' said one currency dealer at a major Ukrainian bank.
'If the hryvna doesn't slip out of the corridor, it will strengthen on the interbank market,' he said.
But the nervous market is looking for more from Yushchenko.
'Certainly, Yushchenko's promises can calm some commercial clients but it is high time to take some decisive steps,' said Valeria Hontareva, financial director at French-owned bank Societe Generale.
'He should not keep people on the edge of their nerves,' she said.
