KYIV, July 15 – President Volodymyr Zelenskiy nominated a banker with an unproven track record as a reformer for governor of the central bank in development that may test the country’s relationship with the International Monetary Fund.

Kyrylo Shevchenko, head of the state-run Ukrgazbank, will have to be approved by Parliament, most likely by the end of the week, to become the new governor of the National Bank of Ukraine.

“Few people know much about him - not proven as a reformer,” Timothy Ash, an analyst at Blue Bay Asset Management, said. “No one really knows where he stands on key issues.”

Shevchenko, 47, was nominated to replace Yakiv Smolii, a reformer who resigned from the post two weeks ago citing ‘systemic political pressure.’ The resignation sparked investor concerns that Ukraine may be about to lose the independence of the central bank, which may now be controlled by powerful political and business figures.

The nomination comes a day after Zelenskiy has assured IMF Managing Director Kristalina Georgieva that the upcoming appointment will strengthen the NBU’s independence and will help accelerate reforms.

Georgieva urged Zelenskiy to “stay the course of sound monetary and financial policies,” adding that preserving the independence of the NBU “is a requirement under the current IMF-supported program.”

The wording suggests any failure to sustain the NBU’s independence and attempts to manipulate its policy would most likely lead to suspension of the IMF’s lending that will have grave consequences for Ukraine.

The IMF approved the $5 billion, 18-month loan on June 9, disbursing about $2.1 billion to Ukraine immediately, while four additional disbursements are contingent on reviews over the program’s life.

The IMF is especially concerned that the NBU may ease its resistance to allowing powerful businessman Ihor Kolomoiskiy, who backed Zelenskiy’s presidential campaign last year, reclaim Privatbank back into his ownership.

Kolomoisky has issued multiple legal challenges against the 2016 nationalization of PrivatBank, which he and partners lost control of after the central bank identified a $5.5 billion hole in its balance sheet.

“In the end [Shevchenko] will be judged by whether he is willing to stand up to Kolomoisky and all the former bank owners and recover assets lost in the 2015-17 bank clean up,” Ash said. “History will judge him.”

Shevchenko spent 11 years between 1995 and 2006 working as a top executive at the Bank Finansy ta Kredyt, owned by Kostiantyn Zhevago, a powerful businessman and an ally of former Prime Minister Yulia Tymoshenko. The bank relied on state financial support for nearly 10 years starting in 2009 before finally going bankrupt.

In 2009, Shevchenko served as an advisor to Prime Minister Tymoshenko, before joining state-owned Ukrgazbank and Oshchadbank in different management roles.

Meanwhile, in a potentially significant development, the Constitutional Court on Thursday is due to start hearings on an appeal from 64 lawmakers seeking to contest legislation that banned former owners of banks to reclaim their former assets. The law, dubbed anti-Kolomoiskiy law, was the key condition from the IMF to approve the $5 billion loan in June.

However, the appeal, signed by Tymoshenko and several lawmakers loyal to Kolomoiskiy, may be opening a legal way for overriding the law and returning the assets to Kolomoiskiy. In this case, a friendly governor of the NBU would be instrumental for Kolomoiskiy to obtain Privatbank. (tl/ez)