KIEV: Ukrainian President Viktor Yanukovich nominated a close ally as central bank governor on Wednesday, an appointment that should clear the way for the indebted country to hold loan talks with the IMF.
The move to promote central bank Deputy Chairman Ihor Sorkin needs parliament's approval. Yanukovich's Party of the Regions and traditional allies, the communists, have a thin parliamentary majority so should be in a position to win a vote, probably later this week.
Sorkin's appointment follows an October parliamentary election and a government reshuffle.
The top central bank post fell vacant when the previous incumbent, Serhiy Arbuzov, was appointed first deputy prime minister last month.
Sorkin's first task will be to secure, with the government, a fresh loan programme from the International Monetary Fund to shore up stretched state finances.
The Fund stopped lending to the former Soviet republic in early 2011 after Kiev refused to raise heavily subsidised household gas and heating prices an issue that is likely to prove a main possible stumbling block also in any new talks.
Sorkin, 45, who had earlier been in charge of supervision of the banking sector at the central bank office in Yanukovich's home region of Donetsk, was named deputy head of the bank in July 2010, shortly after Yanukovich became president.
Analysts said his nomination signalled a continued tight grip by a group of Yanukovich's allies over capital flows in the country.
"The central bank remains under the family's control," political analyst Volodymyr Fesenko said, referring to Yanukovich's inner circle of close relatives and trusted allies.
The mother of Sorkin's predecessor Arbuzov, who also comes from Donetsk, runs a private bank owned by Yanukovich's son Olexander.
"Sorkin represents the same group as Arbuzov, he is (Arbuzov's) trusted person," Fesenko said.
IMF TALKS
The cabinet and the central bank plan fresh loan talks with a visiting IMF delegation this month with a view to working out a package to cover $9 billion in foreign debt repayments falling due this year, including $6 billion owed to the Fund itself.
The central bank's reserves fell by 23 percent last year to $24.5 billion equivalent to the cost of three months of imports as it intervened regularly to keep the hryvnia pegged at about 8 per dollar.
The currency came under pressure as exports of steel, Ukraine's key product, sagged due to slow global growth and overproduction.
Center>Copyright Reuters, 2013
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