The head of Ukraine’s central bank, Andriy Pyshny, has warned that using the hryvnia to cover the budget deficit would carry substantial risks for the country’s macro-financial stability. In a detailed interview with the Financial Times, Pyshny emphasized that resorting to monetary financing would be a quick fix with potentially lasting damage to the economy. He stressed that such a path could undermine confidence, distort inflation expectations, and complicate the central bank’s efforts to manage liquidity and exchange-rate volatility. He also noted that the central bank is committed to avoiding this dangerous shortcut and is seeking more durable funding solutions that align with a stable macroeconomic framework.
