Governor Talks - Ukraine: Effective Central Banking Amid Unprecedented Uncertainty

Governor Talks - Ukraine: Effective Central Banking Amid Unprecedented Uncertainty – Lessons for Others

Location: Meeting Halls A&B HQ1-3-430A&B

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OVERVIEW

National Bank of Ukraine Governor Andriy Pyshnyy will draw on his experience to describe monetary policy implementation, maintaining financial stability, and Ukraine’s strong economic performance following the Russian invasion of Ukraine. He will also share how Ukraine’s lessons can extend to a global landscape increasingly characterized by unprecedented shocks, where policymakers worldwide seek to reconcile needs for innovative thinking and unconventional approaches with the imperatives of maintaining central bank independence and credibility.

REPORT

Key Points:

Crisis preparedness in times of uncertainty. The Governor remarked that, as per the motto of the US Navy, in times of crisis one does not rise to the level of expectations but falls back on the level of preparedness. For the National Bank of Ukraine (NBU), crisis preparedness has been paramount since the invasion of Ukraine. At the onset of the war, NBU activated a package of measures to mitigate panic, ensure operational stability, and help stabilize the economy. This included capital flow restrictions, credit holidays, and promoting cashless transactions which enabled the population to access their funds securely. NBU also provided substantial monetary financing to the government until international support started flowing in. Supported by Fund programs, recent efforts have focused on macro stabilization and structural reforms to enhance economic resilience and growth despite the realities of war and uncertainty.
The importance of cooperation and communication. The design of the ongoing Extended Fund Facility (EFF) was the result of a collaborative and flexible effort with the Fund to respond to the country’s unprecedented challenges. Trust, cooperation, and clear communication among stakeholders—including the ministry of finance, the banks, and the private sector—are key factors that facilitated the successful completion of 5 program reviews despite the ongoing war. This is clearly manifested in the positive economic indicators—the economy grew by more than 5 percent and inflation declined from 26 percent in 2022 to 5 percent in 2023.

Quotes:

“A tourniquet is a means to stop critical bleeding; [at the beginning of the war] we adopted anti-crisis measures like a tourniquet to stop the bleeding and stabilize the [monetary and financial] situation.” “After we reached the agreement on the package of international financial support by end summer 2022, we gradually restored normalcy as no tourniquet can be permanent; they eventually harm more than help.” Andriy Pyshnyy (6:54-7:22; 8:57-9:25)

[Under the current EFF with the IMF], all institutions are undergoing profound structural reforms, [but with the ongoing war it is] like an open-heart surgery to a person who runs a marathon; and I hope we will be successful to change the country to the better and make it stronger.” Andriy Pyshnyy (16:33-17:03)

“Our actions are aimed at shock absorption but also [aim] to build [foundations] for the medium and long term in times of uncertainty; our policy is to shrink the uncertainty generated by the war through communication on our strategic guidelines.” “Strategic planning is our benchmark; the stability we have with the IMF program inspired us to build a policy for the medium and long term.” Andriy Pyshnyy (19:12-20:00; 20:13-20:23)

“This is a macro stabilization program and a program with deep structural reforms; and the idea of course is not to just manage through this war, but to set Ukraine up for a very strong medium trajectory and successful EU accession.” Alfred Kammer (17:41-18:03)

Contributor: Najla Nakhle

SPEAKER

Andriy Pyshnyy
Governor of the National Bank of Ukraine

Andriy Pyshnyy assumed the position of Governor of the National Bank of Ukraine on 7 October 2022.

Andriy Pyshnyy was honored with two prestigious international awards in the field of central banking for his outstanding achievements in 2023:

Central Banker of the Year 2024 in the Global and Europe category by the esteemed British financial publication, The Banker
Governor of the Year from Central Banking Awards 2024, an annual recognition presented by the British specialized magazine Central Banking.

Andriy Pyshnyy has been working in the financial sector since 2000. From March 2014 to November 2020 he served as the Chairman of the Management Board of Oschadbank JSC. In 2012, Andriy Pyshnyy was elected a member of the Ukrainian parliament and the First Deputy Head of Parliamentary Committee on Rules of Procedure, Parliamentary Ethics, and Administration of Verkhovna Rada’s Work. Between 2009 and 2012 he held the position of the Director of Social Strategy Fund LLC. Between August 2007 and June 2009 Pyshnyy served as Deputy Secretary of the National Security and Defense Council of Ukraine.

From April 2007, Pyshnyy was the First Deputy Chairman of the Management Board at Ukreximbank OJSC, and later a member of the Supervisory Board of Ukreximbank OJSC and Oschadbank OJSC. From 2003 to 2007 he held positions as a Management Board Member, First Deputy Chairman of the Management Board, and Acting Chairman of the Management Board of Oschadbank OJSC. In 2000, Mr Pyshnyy embarked on his banking career as Head of the Legal Support Department at Oschadbank JSC.

Andriy Pyshnyy started his career in 1996 as a Teaching Assistant in the Department of Constitutional, Administrative, and Financial Law at Yuriy Fedkovych Chernivtsi National University. He graduated from Chernivtsi National University with a degree in law, and the NBU Ukrainian Academy of Banking with a degree in banking. He holds a PhD in Law.

MODERATOR

Alfred Kammer
Director of the European Department

Alfred Kammer is the Director of the European Department at the International Monetary Fund since August 2020. In this capacity, he oversees the IMF’s work with Europe.

Mr. Kammer was previously the Chief of Staff of the Office of the Managing Director, advising the Managing Director on strategic and operational issues and overseeing operations for the senior management team; Deputy Director of the Strategy, Policy and Review Department, overseeing the work on Fund strategy and surveillance policy; Deputy Director of the Middle East and Central Asia Department, overseeing regional economic developments and financial sector issues; Director of the Office of Technical Assistance Management, advising management on technical assistance operations and overseeing fundraising and global partnerships for capacity building; and Advisor to the Deputy Managing Director. Mr. Kammer also served as resident representative of the IMF in Russia. Since joining the IMF, Mr. Kammer worked with countries in Africa, Asia, Europe, and the Middle East, and on a wide range of policy and strategic issues.