Ukraine's Central Bank Chairman Serhiy Tyhypko said today he was resigning to concentrate on politics, but distanced himself from the prime minister's camp after a presidential election whose result is still contested.
Mr Tyhypko headed Prime Minister Mr Viktor Yanukovich's election campaign team and has vociferously defended his victory in the official count, now subject to a challenge in the Supreme Court.
He said he was no longer head of the premier's team. "I am therefore resigning as central bank chairman in order to devote my time to political work," said Mr Tyhypko.
"I am not staying on as the head of the Yanukovich campaign. We fulfilled our function when the voting took place. From today, I am working only as head of the Trudova Ukraina party." Mr Tyhypko was once believed to harbour hopes of becoming president.
Bankers said Mr Tyhypko's resignation would do little to change the working of the central bank, where he had not worked for more than four months during the campaign.
"For several months, he...had nothing to do with the bank. The banking system was working in a normal fashion. There will be nothing terrible going on," said Mr Oleksander Petseritsyn, chief analyst at Alfa Bank Ukraine.
Mr Kuchma told the central bank chief on Sunday to end his "holiday" as Yanukovich's campaign manager and return to work.
Parliamentary speaker Mr Volodymyr Lytvyn said the situation in the banking sector was dangerous due to a mass run on deposits, particularly in eastern and southern regions.
"The withdrawal of deposits increased by three to five times, particularly in the east," Mr Lytvyn told reporters.
Ukraine's eastern regions form the hotbed of support for Mr Yanukovich, while western and central regions voted for his rival, opposition leader Mr Viktor Yushchenko.
Mr Yushchenko, backed by thousands of vocal supporters on the streets of Kiev, claims that Mr Yanukovich won the election by fraud. Bankers said the run on deposits started weeks before the November 21st run-off vote. People were no longer willing to open savings accounts, they said.
Many in Ukraine have bitter memories of failed monetary reforms which destroyed life savings and have little faith in an undercapitalised and overcrowded banking system. They tend to keep savings in dollars and at home.
The central bank has spent about $2 billion from hard currency reserves in two months to support the hryvnia currency amid growing demand for dollars sparked by capital flight and inflation fears linked to government pre-election spending.