It’s all change in the Ukraine. Parliament has approved the replacement of the central bank chair with his deputy a year before his term had been due to end.
President Yanukovich made the request to replace Volodymyr Stelmakh on Monday, according to a statement on his website. Mr Stelmakh resigned this morning, and parliament approved the chairmanship of 34-year old Serhiy Arbuzov, with 282 of 450 legislators voting in favour. Mr Arbuzov has been first vice-governor since September of this year. Prior to this, he headed up PAO Ukrainskyi Biznes Bank, the country’s 63rd largest lender, which is based in the eastern Ukrainian city of Donetsk, Yanukovych’s home town, according to Bloomberg.
Poland held rates but appeared bullish; the Czech Republic held; and Croatia has cut the rate it pays to commercial banks on their mandatory monetary reserves in local currency to 0.25 per cent from 0.75 per cent.
Meanwhile, Hungary has received a ticking off from the ECB for tardy timekeeping, and the Ukrainian President is apparently trying to replace his central bank governor with an ally.
Proposals to wean eastern Europe off the euro may be misguided.
Plans are afoot to foster local currency wholesale funding: by giving banks local currency credit, the theory goes, they will be able to pass local currency loans on to consumers. Doing this would reduce FX risks for homeowners, who earn in local currencies but often pay back debts in the euro or swiss franc.