Ukraine’s Central Bank Chief Warns Against Monetary Financing to Cover Deficit

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.