Czech president confirms plan to appoint Rusnok as central bank head

By bne IntelliNews January 20, 2016

Czech President Milos Zeman reiterated on January 20 that he plans to appoint former aide and long time ally Jiri Rusnok as head of the central bank later this year.

The statement confirms that the former interim prime minister, now a board member at the Czech National Bank (CNB), remains Zeman’s favourite to replace Governor Miroslav Singer, despite the apparent divergence in Rusnok’s views on monetary policy from those of his mentor in Prague castle. Zeman has regularly slammed the CNB's cap on the koruna, but Rusnok has increasingly expressed support for the regime over the past year or so.

What matters is the candidate’s expertise not whether he shares my views, Zeman told Hospodarske Noviny. The president, who is solely responsible for appointing central bankers, has repeatedly called on the CNB to scrap its policy to keep the koruna below a limit of CZK27 to the euro. 

Zeman claims the policy - in place since November 2013 - hurts most Czechs and is an intentional move by the board - in the main appointed by the previous president - the virulently euroskeptic Vaclav Klaus - to delay the country’s accesssion to the euro. Zeman, who will appoint several new members to the CNB's monetary policy board this year and next, has said candidates should be supporters of euro adoption, and be opposed to the currency cap.

However, Rusnok, who served as a prime minister of the interim government appointed by Zeman in 2013 and was also a finance minister in Zeman’s cabinet in 2001-2002, has become a supporter of the cap since joining the CNB. Many analysts credit the regime with pushing Czech growth to amongst the quickest in the EU last year, and staving off the deflation that has blighted others in the region. The CNB has pledged to keep the cap in place until the end of 2016, but recent statements suggest the regime may be extended into 2017.

The next appointments to the seven-member rate setting board are due in July, when the terms of Singer and Kamil Janacek expire. Two more posts open in 2017 for Zeman to fill before his term ends in 2018.

The president also indicated that he is willing to discuss Janacek's successor with Rusnok and Finance Minister Andrej Babis. "The news should have little impact on the koruna," forecast analysts at KBC, which sat flat at CZK27.01 to the euro at midday.

Related Articles

Hungary lines up yuan-denominated bond for June

Hungary’s is ready to launch its second yuan-denominated bond in June, Economy Minister Mihaly Varga claimed in comments published on May 29. ... ... more

Turkish authorities reportedly plan to curb interest rate race for deposits

Turkish authorities are set to step in to end a potentially dangerous race among the country’s banks to attract deposits, fearing the aggressive strategy may hit the economy through higher lending ... more

Hungarian PM announces generous family support scheme in big election drive

Prime Minister Viktor Orban has outlined ambitious new family policies at the Budapest Demography Forum to challenge Hungary's falling demographics.The government's aim is to increase the number of ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Dismiss