Ukrainian President Viktor Yushchenko rejected as "illegal" parliament`s sacking Monday of the head of the country`s national bank, marking a worsening political deadlock in the former republic, dpa reported. Ukraine`s national legislature, the Verhovna Rada, in a morning session voted no confidence in Volodymyr Stelmakh, director of the National Bank of Ukraine (NBU), citing a fall by nearly half in the value of the Ukrainian currency the hryvna since November, a shrinking economy, and rising government deficits.

A 227-member majority in the 450-seat house supported the no-confidence motion. An alliance of MPs loyal to Ukrainian Prime Minister Yulia Tymoshenko, renegade MPs from a party headed by Yushchenko, and a small group of Communists crossing the aisle joined to approve the measure.

An afternoon statement issued by Yushchenko`s office called the parliament decision "illegal" and repeated support for Stelmakh and his monetary policies.

Ukraine`s national bank in recent months repeatedly attempted, and failed, to prop up the national currency the hryvna, throwing the country`s budget badly into the red.

Tymoshenko and Yushchenko, allies during Ukraine`s 2005 pro-democracy Orange Revolution, currently are political enemies, with President Yushchenko favouring conservative market reforms to deal with the impact of the world financial crisis on Ukraine`s economy.

Prime Minister Tymoshenko for her part supports populist measures including nationalization of some major industries, and possible rejection of International Monetary Fund restrictions on deficit spending.

Tymoshenko speaking at a Kyiv press conference said parliament would soon sack other Yushchenko appointees and amend laws currently controlling the country`s monetary policy in a February 3 session.

"We have the votes and we will take the necessary steps," Tymoshenko said. "Parliament will take charge of other difficult problems ... and we will not wait long."

The assault by the Tymoshenko-led parliament on Yushchenko`s conservative monetary policy marked a worsening of the deadlock in Ukraine`s government, begun last year after the two politicians fell out over separation of powers in government.

dpa via Earth Times