Head of Ukraine Central Bank quits

The head of Ukraine’s Central Bank resigned today, and media reports quoted him as praising opposition protests and calling for at least a partial re-ballot in the country’s disputed election.

Serhiy Tyhypko had taken leave from his job since the summer to head the campaign of Prime Minister Viktor Yanukovych.

“He issued a statement announcing his resignation from the post of the Central Bank’s governor and as Yanukovych’s campaign manager,” said Henady Korzh, Tyhypko’s spokesman.

Yesterday outgoing President Leonid Kuchma ordered him to end his leave and get back to work at the Central Bank today.

The president later warned that the country’s financial system could fall apart in a few days because the government could not work in the normal way.

Tyhypko said he would resign from his campaign post since he had completed his “duty… after the end of voting”.

But, in a surprise move, he added that he supported the massive protests for Yanukovych’s rival, opposition candidate Viktor Yushchenko, that have paralysed the Ukrainian capital since the hotly-contested vote.

The official results of the November 21 presidential run-off gave victory to Yanukovych, but Yushchenko is demanding a new vote following claims of ballot fraud. The dispute has plunged Ukraine into a crisis, with large protests in the capital Kiev and regional officials threatening to seek autonomy.

Tyhypko sharply criticised the decision of pro-Yanukovych officials from the south-east to initiate a referendum on autonomy. He called it “insane”.

“We should rather look for ways to resolve the disputes… I am ready to act in that direction,” Tyhypko said, adding that “basically, I like what is happening on the square,” referring to Independence Square, the epicentre of the pro-Yushchenko protests, the Unian and Interfax news agencies reported.

He also demanded fresh ballots in contested election districts, saying: “We need a re-vote and we need it soon.”

Korzh said that a “deputy (governor) will replace Tyhypko” at the Central Bank but did not elaborate.

Tyhypko, a former economics minister and a ranking official in the pro-Yanukovych Working Ukraine Party, accepted the post of governor of the Central Bank in 2002.

He was credited with maintaining the stable exchange rate of Ukraine’s national currency, the hryvnya, and maintaining a relatively low level of inflation.

The opposition had accused Tyhypko earlier of using government funds to support Yanukovych’s campaign – which he vigorously denied.

Andriy Dmytrenko, an analyst with the Kiev-based Dragon Capital investment house, said the effects of Tyhypko’s resignation “might not be significant”.

“He wasn’t doing much over the last few months. The bank was run by his deputies anyway,” Dmytrenko told the Associated Press.

Ukraine’s economy is considered the fastest-growing in Europe. But economists have forecast that inflation will reach double digits this year and possibly jump to 15 per cent in the first quarter of 2005.

Dmytrenko said that the current political turmoil could slow industrial output “to an extent” and increase worries over Ukraine’s ability to make payments both inside the country and abroad.

“However, since the opposition has promised it will not block the state treasury, the government will be able to make payments from the budget,” he said.

At a session with Yanukovych and government ministers, Kuchma said the country’s financial system could “fall apart like a house of cards” in a few days.

“Neither the president nor the government can be held responsible for this,” Kuchma said. “The government cannot work in a normal way as you can all clearly see.”

Yushchenko, who was the Central Bank governor between 1993 and 1999, rejected the government’s accusations that the opposition was trying to paralyse the country’s financial and banking system.