International Monetary Fund Managing Director Kristalina Georgieva has thrown her support behind U.S. Federal Reserve Chair Jerome Powell, warning that eroding central bank independence risks economic stability at home and abroad. Speaking in an interview with Reuters on Thursday, Georgieva said there was overwhelming evidence that independent, data-driven central banks act in the best interests of businesses and households and remain essential to financial and monetary stability.
Her comments come as Powell faces an unprecedented investigation by the Trump administration over cost overruns tied to a $2.5 billion renovation of two historic buildings at the Federal Reserve’s Washington headquarters. Powell has denied any wrongdoing and said the probe is a pretext to pressure him for resisting President Donald Trump’s repeated demands for aggressive interest rate cuts. Trump has openly dismissed concerns that undermining the Fed’s independence could weaken the U.S. dollar or fuel inflation, telling Reuters this week that he did not care.
Georgieva said she had worked closely with Powell and described him as a highly professional and respected figure within the global central banking community. She noted that his standing among peers, including public backing from former IMF chief and current European Central Bank President Christine Lagarde, underscored the importance of insulating monetary policy from political interference. She added that the IMF pays close attention to the strength of institutions such as the Fed, given the U.S. dollar’s central role as the world’s primary reserve currency.
The investigation into Powell has drawn criticism from Republican lawmakers in the U.S. Senate, foreign economic officials, investors and former U.S. government officials from both major parties. The controversy has also unfolded alongside Trump’s attempt to remove another senior Fed official, Governor Lisa Cook, a move that has triggered a legal challenge set to reach the U.S. Supreme Court next week.
Georgieva’s defense of central bank independence coincided with her arrival in Kyiv early Thursday for high-level talks with Ukrainian leaders, a visit confirmed by sources familiar with the matter and reported by Reuters. She is expected to meet President Volodymyr Zelenskiy, Prime Minister Yulia Svyrydenko, central bank chief Andriy Pyshnyi and senior business figures as Ukraine prepares to mark the fourth anniversary of Russia’s full-scale invasion on February 24.
Security concerns kept details of the visit tightly guarded. Georgieva last visited Ukraine in February 2023 and has personal family ties to the country. Her trip comes as Kyiv seeks to secure a new four-year, $8.2 billion IMF lending program agreed in principle in November, contingent on further reforms and assurances of donor financing.
Approval of the program is seen as critical to unlocking additional external investment needed to close Ukraine’s financing gap, which the IMF estimates at around $136.5 billion through 2029 due to the ongoing war. Ukraine is projected to spend more than a quarter of its gross domestic product on defense in 2026, placing immense strain on public finances.
During the visit, Georgieva is expected to review Ukraine’s progress on passing a 2026 budget, broadening its tax base, combating tax evasion and ensuring sustained donor support on grant-like terms. The IMF has emphasized the need to tackle informal economic activity, close customs loopholes, tax income earned through digital platforms and maintain the independence of anti-corruption institutions.
The planned IMF program would replace Ukraine’s current $15.5 billion arrangement, of which more than $10 billion has already been disbursed, and reflects revised assumptions about the war’s trajectory. While the baseline scenario anticipates the conflict ending this year, it also includes a downside scenario in which hostilities drag on until 2028, underscoring the scale of uncertainty facing the country and the global financial system.
