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Ukraine's Central Bank Governor Yakiv Smoliy speaks during an interview in Kyiv on Dec. 5, 2018.

VALENTYN OGIRENKO/Reuters

Ukrainian Central Bank Governor Yakiv Smoliy said on Friday he had quit to register a protest against sustained pressure from the government and politicians to take policy decisions that were not based on economics.

Speaking minutes before parliament voted to approve his resignation, Smoliy said the National Bank of Ukraine (NBU) had been pressured to cut interest rates, let inflation rise and the hryvnia lose value.

He also complained of smear campaigns against him and other central bank employees, paid rallies outside the bank and pressure being exerted on courts where the central bank was involved in legal cases.

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It was the first time Smoliy has spoken at length in public since his shock resignation on Wednesday evening, which rattled the market and raised concerns among Ukraine’s Western backers about the government’s commitment to reforms. “My resignation – this is a protest, a signal, a red line,” Smoliy told lawmakers.

“I made a difficult but necessary decision – to resign, because for a long time the National Bank has been under systematic political pressure, pressure to make decisions that are not economically justified ... and can cost the Ukrainian economy dear,” he added.

President Volodymyr Zelenskiy’s office has denied that Smoliy has been put under pressure and sought to reassure investors that the central bank would remain independent under Smoliy’s successor, who has yet to be named.

Smoliy’s deputy Kateryna Rozhkova took temporary charge and told reporters at a briefing that maintaining the central bank’s independence would remain a “red line,” and that it would not be pressured into printing money.

Smoliy said he also foresaw no change to the central bank’s policy toward PrivatBank, the country’s largest lender, whose fate is crucial to Ukraine receiving loans under a $5 billion deal from the International Monetary Fund.

Danylo Hetmantsev, the head of the parliamentary finance committee and a member of Zelenskiy’s party, praised Smoliy for lowering interest rates and inflation but blamed him for letting the hryvnia rise and for restricting access to cheap credit.

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