Ukrainian lawmakers failed to back a presidential decree dismissing the central bank governor, who opposition parties said should first explain plummeting foreign- currency reserves and high borrowing costs.
Serhiy Arbuzov’s departure was supported today by 217 pro- presidential lawmakers, less than the 226 votes needed. Thirty deputies from President Viktor Yanukovych’s ruling Party of Regions failed to vote. Opposition lawmakers abstained.
“Arbuzov must report on why central bank reserves shrank and interest rates on loans remain high while inflation is near zero,” opposition leader Arseniy Yatsenyuk told Parliament in the capital, Kiev.
Yanukovych promoted Arbuzov to first deputy prime minister last month and picked Ihor Sorkin as his replacement before this month’s International Monetary Fund visit over a new bailout. While the constitution grants the president power to name and dismiss the central bank governor, his decisions must be approved by Parliament.
The hryvnia declined to 8.1237 per dollar at 5:11 p.m. in Kiev from 8.0999 yesterday, data compiled by Bloomberg show. Selling pressure on the currency helped trigger a 23 percent plunge in foreign reserves last year to $24.5 billion, the lowest since February 2010.
“It looks like Party of Regions lawmakers will be stimulated to vote more actively tomorrow or at the earliest opportunity,” Alexander Valchyshen, head of research at Investment Capital Ukraine in Kiev, said by phone. “This needs to be done, because the IMF visit is coming up and officials need to be in place. No one can be in an unstable position, including the head of the central bank.”
The IMF postponed a December trip to Ukraine until mid- January to allow a new cabinet to be chosen. Ukraine’s economy shrank 1.3 percent from a year earlier in the third quarter on slowing global demand for steel.
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.
Opposition deputies had earlier today blocked the parliamentary rostrum, demanding a discussion on changes to the criminal code that would release former Prime Minister Yulia Tymoshenko from prison. The issue will be debated tomorrow.