The National Bank of Ukraine maintains its independence even in the context of the full-scale war initiated by Russia, which aids the central bank in achieving effectiveness in its operations, stated NBU head Andriy Pyshnyy, who was appointed to this position on October 7, 2022.
"I haven't felt any pressure over these two years or the need to remind anyone about the independence of the National Bank. The independence of the National Bank is both a goal and a resource, as it allows us to build a completely different level of trust in our policy," he said in an interview with the Interfax-Ukraine agency.
According to him, everyone is currently under the pressure of circumstances created by the war; however, as of now, the central bank's team is managing to be sufficiently effective in implementing a policy of interaction, open dialogue, justifying its position, and communicating to all stakeholders the importance of preserving the institutional independence of the NBU as a common resource.
Pyshnyy noted that he spends a lot of time on communications, horizontal diplomacy, and explaining the National Bank's position.
"Perhaps in some aspects, I even feel that I am lacking. And then I start to do more because if you have explained your position, if you have justified it, then at least you have reacted preventively to possible risks," he added.
As a positive outcome, he cited the example of 2023-2024, when the internal debt market became the source of financing for defense needs instead of issuance.
Pyshnyy also pointed out claims from some media that international partners are pressuring the National Bank ahead of the recent IMF mission visit to Ukraine for a larger devaluation of the hryvnia. He stated that during the mission, discussions with the IMF do indeed cover the dynamics of various macroeconomic indicators, including the deficit and exchange rate.
"We are modeling baseline scenarios, alternatives, and assessing the situation. Because for us, such missions are an opportunity to leverage expertise and conduct stress testing of our vision. But does anyone other than the National Bank determine the exchange rate policy? - No, it is solely the responsibility of the NBU," emphasized the head of the central bank.
At the same time, he noted that in wartime, it is essential "to clearly understand that you are not operating in a vacuum, and an ivory tower is fundamentally impossible."
According to Pyshnyy, he has managed to maintain an effective dialogue that began on the first day with Finance Minister Serhiy Marchenko, which, along with a reevaluation of approaches, has allowed for the restoration of the internal debt market and a move away from issuance financing of the budget deficit.
"I really hope that this will continue despite new challenges such as an expanding budget deficit," emphasized the head of the NBU.
Commenting at the agency's request on the divergence of positions with the Ministry of Finance regarding the appropriateness of retroactively increasing the bank profit tax in 2024 from 25% to 50%, Pyshnyy indicated that he understands the minister's position, which he clearly explains, stating that this was the only opportunity to pass a package of tax initiatives at the parliamentary level.
At the same time, the head of the NBU emphasized that the central bank remains firm in its stance against such an increase and defended this position until the last moment.
"We remain very open to dialogue. Is there a need to discuss? - Let’s do it. Is there a need to justify? - Let’s do it. But we reserve the right to say 'no.' Or to say 'not the right time.' Or to say 'let’s do this another way that will not actually create additional risks.' And so step by step," concluded Pyshnyy.
Overall, he emphasized that the NBU's mandate is price stability, financial sustainability, and support for the economy, an essential component of which is independence, clearly defined by the law on the NBU, and it is impractical to suggest that it needs to be reconsidered at this time.