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efore she was appointed to head
Ukraine’s central bank last June,
Valeriia Gontareva was praised as one
of the most successful investment
bankers in the country.
Since then, she has heard little but
demands for her downfall.
Every day dozens of people chant “Gontareva!
Resignation! Prison!” outside her office in Kiev.
Prosecutors have launched a criminal investigation into
the fall of the hryvnia currency. Tabloids published
photos of her son relaxing in expensive hotels while
Ukraine teeters on the brink of bankruptcy.
Last week one political party in the governing
coalition unfurled a banner behind the speaker’s chair
“Sack Gontareva, the looter!” it read.
Certainly, no central banker would envy her record
on paper: in less than nine months since she took
office, the hryvnia has fallen to around 30 to the dollar
Inflation has jumped to 25% from 12%, bank
deposits have fallen by a third, a quarter of banks have
gone bankrupt and the central bank’s foreign exchange
reser ves have shrunk to $6.42 billion from $17.08
Thanks to the falling currency, the average monthly
wage is now worth only around $150. The country is
nearly broke, haemorrhaging cash in a war in the east
and suffering from decades of mismanagement and
Last Wednesday, it looked like the 50-year-old
might finally be finished. With the hryvnia plunging
yet again and no floor in sight, Gontareva suddenly
announced a ban on nearly all commercial currency
trading for the rest of the week.
A furious Prime Minister Arseny Yatseniuk told a
televised cabinet meeting that the ban was a threat to
Gontareva had taken the decision without
consultation, he said. He himself had found out about
it that morning from the internet. He would demand
Gontareva was summoned for a three-hour
emergency meeting with Yatseniuk, President Petro
Poroshenko and Finance Minister Natalia Yaresko.
After, at a hastily-organised news conference,
journalists asked Gontareva whether her resignation
She said it had not been discussed. Finance Minister
Yaresko backed her up: “ We have more important
points to discuss: how to stabilise the financial system.”
That night, the currency trading ban was lifted as
suddenly as it had been imposed. If the rapid reversal
looked like erratic policy making, it also proved
effective: while the market had thought the ban would
last the full week, the central bank had swooped in and
bought dollars at a discount. The next day, it sold them
at the same reduced price, putting a floor under the
value of the hryvnia.
By Monday, the hryvnia was trading at a rate nearly
20% stronger than its low six days earlier, before the
Still, few came to Gontareva’s defence.
“I have no doubt that Gontareva is smart and she
has her strong points which helped her become a
successful investment banker,” Gleb Vyshlinsky,
analyst of GfK Ukraine said. “ But it seems that she
overestimated her competence. She agreed to become
the central banker and now her reputation is ruined.”
Currency traders say the hryvnia’s slide was halted
mainly by administrative measures that hurt importers,
and which won’t work in the long term.
“The bank is doing everything it can to squeeze the
market and prevent importers buying currency,” one
bank trader said on condition of anonymity required
by the employer.
“Now, all (import) contracts need to be confirmed,
and the bank is confirming them in a lackadaisical
way. To call this skilful central bank policy is out of the
Gontareva’s job is safe unless she quits or Poroshenko
asks parliament to sack her. So far he has shown no
public sign of withdrawing support. O ver the weekend
he backed efforts to push the hryvnia back up to 20-22
to the dollar.
Poroshenko’s aides say it was precisely Gontareva’s
willingness to press ahead with hard decisions under
fire that led the president to pick her in the first place.
“He knew that she could go ‘kamikaze’, that she had
to take unpopular painful measures,” an official close to
the president said.
Poroshenko’s own popularity has fallen with the
currency, and he may yet decide Gontareva needs to be
sacrificed. Some analysts believe she may go once the
IMF gives the final blessing to the $17.5b four-year
From the outset, she took on the central bank’s
bureaucracy, often angering staff.
“If your manager says that at your organisation there
are 50% superfluous people and they have to go, I do
not think that you would like it,” said one employee at
Another predicted mass resignations if she stays.
“It is like she came from another planet.... She
is a vivid example of the fact that not all private
businessmen or people from the private sector can
manage the public sector.”
Her boldest move yet was to cancel a fixed exchange
rate, which prompted a dramatic sell-off in the
hryvnia. The currency has already lost half its value
since the start of 2015 after halving over the whole of
She told furious lawmakers that unmooring the rate
was necessary due to a lack of economic reforms over
the past 20 years, a weak economy and the separatist
war in the east.
“My main message is: we will never ever have a fixed
rate. Crisis is a time of action for the National Bank,”
she told parliamentary hearings.
Angry lawmakers pelted her with fake dollars.
Responding to a lawmaker who asked where people
could buy foreign currency as it was disappearing
from exchange offices, she said sharply: “Do not buy
Everyone who buys currency creates panic.”
Gontareva studied economics before embarking
on a 20-year career in finance, working at Ukrainian
subsidiaries of Societe Generale and ING before
becoming chairman of Investment Capital Ukraine
(ICU), an investment company founded by her
She told the newspaper Kommersant in late 2007
that she saw no reason why ICU couldn’t become
Ukraine’s third-biggest investment firm. It did better,
reaching second place last year with 18% of the local
An employee from those days says Gontareva “is very
persistent and usually succeeds. She was an extremely
democratic and liberal but very demanding leader.”
Defiant as ever, Gontareva told on-line newspaper
Ukrainska Pravda that she had received words of
support from abroad, including from IMF chief
“They said I’m really great, that I took on an
incredible challenge.” — Reuters
PICTURE: John Bisset
The sun sets over the Cobden Aromahana Sanctuar y, tiphead and Greenstone Park Speedway, photographed from a drone in September 2014.
Valeria Gontareva, the head of Ukraine’s Central Bank.
West Coast from above
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