Czech President Milos Zeman on May 25 named economist and protege Jiri Rusnok, a former centre-left politician who has served as both finance minister and minister of industry and trade, as governor of the Czech National Bank (CNB).
Zeman appointed Rusnok, a long-time political ally, to the CNB board in early 2014, and he has been understood to be in line to replace Miroslav Singer, whose second six-year term expires at the end of June, ever since. While the new governor is unlikely to change the current cap on the koruna that the president so detests, he is a supporter of a potential move to negative rates as an additional tool to help stimulate the economy and inflation.
“I am greatly honoured to be able to stand at the helm of this unique and internationally acclaimed institution. My colleagues and I will do all we can to ensure that all the tasks conferred on us by law, particularly in the areas of price and financial stability and financial market supervision, continue to be performed with the utmost expertise and care and to the benefit of the Czech economy,” Rusnok said in a statement.
Rusnok, who briefly led a caretaker government, held senior positions at ING bank before joining the central bank. On May 17, Zeman named two economists who have worked with Rusnok to the board: Vojtech Benda, who served as chief economist at ING and at local broker BH Securities, and Tomas Nidetzky, a management committee member at insurer NN (from which ING exited fully in mid-April).
Zeman and Rusnok hold conflicting views on the exchange rate policy commitment. Rusnok credits the CNB’s cap on the koruna to at CZK 27/€ as having given the economy a much-needed boost since its introduction in November 2013; the president insists it hurts most Czechs and is part of a plot by the current board –appointed by Eurosceptic former president Vaclav Klaus – to delay adoption of the euro.
The CNB board has seven members. Besides Miroslav Singer and Jiri Rusnok, the current line-up includes Vice-Governors Mojmir Hampl and Vladimir Tomsik, and members Kamil Janacek, Lubomir Lizal and Pavel Rezabek. As with Singer, Janacek’s mandate will also end on June 30.
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