National Bank of Ukraine - a complete shambles

Today, at a press conference, PM Tymoshenko sensationally blamed, in no uncertain terms, our old friend Dmityro Firtash and the Presidential Secretariat for the hryvnia’s collapse. She accused the president of covering up and benefiting from major financial speculation.

"The budget of Ukraine has become hostage to a huge speculative operation.. the 10 hryven to the dollar exchange rate, makes it impossible to sell gas, which we import, on the internal market. It makes it impossible to buy nuclear fuel, medicines for people, makes it impossible for people to pay back [dollar] credits which they took out for example, for apartments," she complained.

Here's a portion of Unian's [English language] report on this:

"Prime Minister of Ukraine Yulia Tymoshenko promises to turn to international organizations who investigate into laundering illegally acquired money if the National Bank of Ukraine [NBU] does not stabilize the hryvnia’s value in the nearest future.

Yulia Tymoshenko stressed that the actions of the national bank may be assessed as "a banal crime", and called on to open a criminal case against them.

Andriy Kovalchuk, in an excellent detailed "Holos Ukrainy" article [in Ukrainian and Russian] entitled "Lack of financial regulation tempts - or how the National Bank of Ukraine earns money", claims that despite the reluctance of the NBU to 'come clean' on this matter, it seems that at least $12Bn US dollars of NBU currency reserves have been frozen, i.e. is inaccessible to the Ukrainian state. This sum has appeared in the accounts of the now-bankrupt Lehman Brothers investment bank. Furthermore $1.25Bn dollars were also deposited in the "Wachovіa" bank [recently called "the worst run bank in America..LEvko ]

Kovalchuk's provides a number of conclusions and recommendations. At the moment the NBU can do as it pleases while the Verkhovna Rada and government remain mere observers but have to bear all of the responsibility for the bank's blunders [some of them possibly criminal]. He details Ukrainian laws on "The National Bank of Ukraine" that need to be urgently changed in order to overcome the current shambles. [Thanks Pete for the link]

Tonight, 412 parliamentary deputies supported a motion to create a parliamentary investigative committee to look into the NBU's activities. And Petro Poroshenko, Chairman of the Council of the National Bank of Ukraine also tonight claimed on TV that the head of the NBU Volodymyr Stelmakh has been keeping information about the bank's transactions away from him...

Note: According to the Constitution of Ukraine the major function of the NBU is to ensure the stability of the monetary unit, and the Council of the National Bank of Ukraine elaborates the basic principles of monetary and credit policy and exercises control over its execution.