Bloomberg News

Ukraine’s Yanukovych Nominates Sorkin to Head Central Bank

January 09, 2013

Ukrainian President Viktor Yanukovych picked Ihor Sorkin to head the central bank before this month’s International Monetary Fund visit over a new bailout.

A draft bill nominating Sorkin, who’s currently acting governor after Serhiy Arbuzov was promoted to first deputy prime minister last month, was published today on parliament’s website. His appointment requires approval by lawmakers.

Yanukovych, whose Party of Regions fell short of securing a majority in winning October parliamentary elections, said Dec. 24 that closer cooperation between the government and the central bank is needed. The IMF postponed a December trip to Ukraine until mid-January to allow a new cabinet to be chosen after the ballot.

“Sorkin’s nomination is a status-quo move,” Luis Costa, an emerging-market strategist at Citigroup Inc., said by phone from London. “It looks like a natural continuation of the current policy. Sorkin was deputy governor, and worked in relative harmony with Arbuzov.”

The hryvnia declined to 8.0949 per dollar by 2:34 p.m. in the capital, Kiev, compared with 8.0650 yesterday, according to data compiled by Bloomberg.

Donetsk Connection

Sorkin, 45, was born in the eastern city of Donetsk in Yanukovych’s native region, according to the Audit Chamber. He was named deputy central bank governor in July 2010, leading the regulator’s supervisory department.

Ukraine, whose economy shrank 1.3 percent from a year earlier in the third quarter on slowing global demand for steel, plans to seal a $12 billion IMF program and wants to receive $1.5 billion in February, the Kommersant-Ukraine newspaper reported Dec. 12, citing an unidentified person at the central bank with knowledge of the matter.

A previous bailout was frozen by the Washington-based lender because the government refused to trim residential heating subsidies. That loan expired Dec. 31.

The central bank will defend the hryvnia from attacks that may negatively influence inflation, according to Valeriy Lytvytskyi, chief adviser to the regulator.

“The hryvnia rate will be more volatile but we’ll fight speculative attacks,” he told reporters today in Kiev.

Ukraine’s foreign reserves plunged 23 percent last year to $24.5 billion, the lowest since February 2010, amid selling pressure on the currency. Reserves are at a “decent” level, Lytvytskyi said.

To contact the reporters on this story: Kateryna Choursina in Kiev at kchoursina@bloomberg.net; Daryna Krasnolutska in Kiev at dkrasnolutsk@bloomberg.net

To contact the editors responsible for this story: Balazs Penz at bpenz@bloomberg.net; James M. Gomez at jagomez@bloomberg.net


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