Yushchenko Blames Finance Ministry For Growing Inflation In Ukraine

KIEV, Ukraine -- Ukrainian President Viktor Yushchenko has blamed the Finance Ministry for growing inflation and suggested that the National Bank of Ukraine has come under the Finance Ministry's influence.

Finance Minister Victor Pynzenyk is blamed for Ukraine's high inflation.
"In three months, we reached 12% inflation and surpassed the yearly target. This was done because of the government's and the Finance Ministry's actions, because we were pursuing a weak spending policy. It disrupted stability. Then a scapegoat was found, the National Bank, which was told: come and correct the situation," Yushchenko said on the Inter television channel on Friday evening.

In these circumstances, the National Bank improved the inflation situation using its tools, but the ensuing shortage in national currency, the hryvnia, negatively affected the production sectors of the economy, he said.

"I am sure that the National Bank should have said a categorical 'no' in May and June. The National Bank is actually the only institution in Ukraine that needs always to say 'no'. It should be like a rock in defending the stability of the national hryvnia," Yushchenko said.

The National Bank of Ukraine was building its exchange rate policy under pressure from the government, he said.

"The fact that the hryvnia strengthened in May and then rolled back three months later undeniably shows that the National Bank made concessions where it should have stood professionally till the very end," he said.

Source: iStockAnalyst