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UPDATE 1-IMF calls on Ukraine to guard central bank governance criteria

(Adds comments of central bank governor, analyst)

KYIV, Oct 8 (Reuters) - The International Monetary Fund has urged Ukraine to adhere to a framework on central bank governance developed with its help, after two senior officials were censured for comments in the media, the IMF’s representative in the country said on Thursday.

The National Bank of Ukraine’s (NBU) supervisory council declared “no confidence” in two deputy governors on Monday after they expressed concern about what they saw as attempts to undermine the central bank’s independence.

“The framework has served the NBU - and the Ukrainian economy - well by strengthening the confidence in the NBU as an independent and professional central bank,” the IMF representative in Ukraine, Goesta Ljungman, said in a statement.

Central bank governor Kyrylo Shevchenko told Ukrainian newspaper Dzerkalo Tyzhnia the deputies’ comments had violated the bank’s “one voice” policy.

“This is a story of violation of internal procedures, not political pressure,” he said in the interview published on Thursday.

Shevchenko said any inconsistency in the bank’s communications undermined confidence in its actions and could harm talks with the IMF.

The IMF agreed a $5 billion loan package with Ukraine in June to help the country maintain financial stability amid the economic disruption caused by the coronavirus pandemic.

But a $700 million tranche of the stand-by programme expected in September has been delayed due to IMF concerns over Ukraine’s progress on anti-corruption reforms and commitment to central bank independence after changes in top management.

Yakiv Smoliy, the previous central bank governor, resigned in July blaming constant political pressure on the bank.

“We are seeing a fundamental clash now in management styles between the more modern collegiate approach..., and the older school centralising/power vertical approach of Shevchenko,” Timothy Ash at Blue Bay Asset Management commented on Twitter. (Reporting by Natalia Zinets; Editing by Toby Chopra and Alex Richardson)

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