The head of the National Bank of Ukraine (NBU) resigned on October 4 citing health-related reasons. 

Kyrylo Shevchenko, who was appointed in July 2020, thanked President of Ukraine Volodymyr Zelenskiy as well as the NBU team and said he had acted primarily as a “crisis manager” who had fulfilled his mission during one of Ukraine’s most challenging moments.

“Since my first days of office, I had to act primarily as a crisis manager and I fulfilled my mission by ensuring uninterrupted operation of the financial system during the extremely difficult times of a full-scale war,” Shevchenko wrote on Facebook. “The war was yet another difficult test for our team and for me personally. I think we have passed it with dignity.”

He noted that since the start of Russia’s full-scale invasion, the NBU had ensured uninterrupted operation of the financial system, prevented panic in FX market, put a stopper in the large-scale capital outflow to protect the reserves, kept inflation at an adequate level and supported the state budget with over $10bn, understanding the difficulty of raising money elsewhere during the war.

The NBU has been faced with the challenge of Ukraine’s economic crisis which led to the hryvnia being devalued by 25% and discount rates rising to 25% over the summer. Nevertheless, Ukraine’s banking sector managed to weather the storm and even jump back into profit in July.

“Today, the NBU is stronger than ever in its ability to meet challenges and overcome crises and is passing the test of war in a dignified manner. The central bank continues to serve as the foundation for economic recovery in the post-war period, and retains the ability to steer the entire financial sector towards this goal,” Shevchenko wrote.

After his appointment Shevchenko continued the clean-up of the banking sector prior to the war, winning a reputation as a high competent manager and continuing the work of his predecessors former NBU governor Valeria Gontareva and Yakiv Smolii, who cleaned up the sector starting in 2014 and all ran prudent monetary policies.

The banking sector was growing strongly in 2021 before the war started and while it has been knocked bank part of the reason that Ukraine has managed to avoid a banking crisis once the war started was thanks to the robust health of the sector in February. The banking sectors biggest problem is the overhang fo non-performing loans (NPLs) that account for half the sector’s loan book, but as part of the NBU clean up 90% of these bad debts have been provisioned for and so have not represented a strategic risk to shock-rocked sector.

Shevchenko raised eyebrows with some controversial staff decisions, sacking some well-respected members of the board from Smolii’s tenure, but overall he has won overwhelming praise for his management of the sector.

“My role at the NBU is to ensure the bank operates on an independent basis,” said Shevchenko in an interview with bne IntelliNews in 2021, his first every interview with the international press.

“There has been friction and there [is] political pressure to undermine the independence of the central bank but the continued independence of the NBU is no longer one of the IMF's concerns,” added Shevchenko, who ran the state-owned Ukrgasbank and worked in banking for 27 years before appointed governor of the central bank.

“My priorities are to ensure the independence of the NBU as an institution and operationally. Also to ensure its financial standing and from the personal ambitions of the personnel,” the governor added.

Shevchenko has submitted his resignation letter to the Rada, which has to sign off on it and will consider the application to quit in the upcoming sessions.