The announcement of the resignation of the Governor of the National Bank of Ukraine, Yakiv Smolii, against the backdrop of alleged political pressure "sends a worrying signal", reads a statement by Peter Stano, EU's Lead Spokesperson for Foreign Affairs and Security Policy.
The National Bank of Ukraine chief said he has handed his resignation to President Volodymyr Zelensky.
"This decision has been taken as an answer to systematic political pressure that denied fulfillment of my duties as Governor".
"Let it be a warning for attempts to undermine institutional independence of the central bank".
The central bank has previously complained of being subjected to pressure, including over its decision in 2016 to nationalise Ukraine's largest lender, PrivatBank, which was formerly co-owned by businessman Ihor Kolomoisky, a backer of Zelenskyy.
The money is also meant to go towards policies to ensure continued central bank independence with IMG managing director Kristalina Georgieva saying that the NBU "has skillfully managed policy during a very challenging period" and that "Central Bank independence should be preserved". "Bad news for Ukraine", said Timothy Ash at Blue Bay Asset Management. "Who succeeds Smoliy will be critical".
The negative fallout from Smoliy's resignation prompted the finance ministry to say it was not going ahead with a planned offering of dollar-denominated Eurobonds.
In the wake of the resignation, Ukraine's currency, the hryvnya, fell to its lowest level against the USA dollar since April.
"Under his leadership, Ukraine has made important strides in achieving price stability, amply demonstrating that an independent central bank is a key element of modern macroeconomic policymaking", an International Monetary Fund spokesman said in a statement on Thursday.
The bill last month was criticised by the G7 ambassadors to Ukraine, who said that "undermining the NBU's independence" would "jeopardise global support for the Ukrainian government's efforts".
Ukraine's economy is expected to contract by around 5% this year because of the novel coronavirus pandemic.