KIEV, Sept. 16 – Prime Minister Yulia Tymoshenko on Wednesday appointed Oleksandr Savchenko, the recently resigned central banker, as a deputy finance minister.

The appointment goes in line with speculation that Savchenko has been a Tymoshenko loyalist, suggesting his recent attack on the leadership of the National Bank of Ukraine may be politically motivated.

Savchenko resigned last week from his post as an NBU deputy governor, citing sharp disagreement with the leadership of the NBU over the monetary policy and the hryvnia’s weak performance. He also accused unnamed NBU officials of corruption.

The resignation followed an announcement by Interior Minister Yuriy Lutsenko, another Tymoshenko loyalist, of plans to question Anatoliy Shapovalov, the first deputy governor at the NBU, over spending refinancing cash.

Both events have added pressure on the NBU, highlighting its de-facto involvement into politics ahead of the next presidential election, which is due Jan. 17, 2010.

The hryvnia’s depreciation against the U.S. dollar appears to be an issue ahead of the election, and Tymoshenko has been working hard to distance herself from the hryvnia’s weakness.

Savchenko is the most senior central banker that has openly defected to the Tymoshenko camp, opening the possibility of his nomination as the governor of the NBU in the event of Tymoshenko victory at the election.

It is the president who nominates the governor of the NBU, according to the constitution.

President Viktor Yushchenko earlier this month warned that the government’s pressure to force the NBU to print about 10 billion hryvnias before the end of the year is causing major downward pressure on the hryvnia.

Yushchenko urged the government to cut budget deficit to levels that can be handled without the monetary emission.

But Savchenko on Friday turned on the Yushchenko office for “interfering” with the NBU’s policy, and said this interference and some other factors have been causing expectations of devaluation.

The government relies on the money printing amid weak budget revenue this year. Ukraine’s budget revenue fell sharply – by up to 20% - this year as many businesses had to shut down or stay idle as the economy had contracted 20.3% on the year in the first quarter.

The government managed to finance most of expenditures this year by borrowing from the International Monetary Fund, collecting taxes early from state companies and massively postponing tax rebates to exporters. (tl/ez)