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Czech Central Bank Nominee Singer Sees No Need for Major Change

Czech president names Singer as central bank governor
Miroslav Singer who will replace Zdenek Tuma as central bank governor. Photographer: Dieter Nagl/Bloomberg

Miroslav Singer, a University of Pittsburgh-trained economist, was named the next governor of the Czech central bank today. He said there’s no need for major monetary policy changes when he takes office July 1.

The 42-year-old Singer, who has been deputy governor since 2005, was appointed by President Vaclav Klaus during a ceremony today in Prague. He will be the third head of the central bank since the fall of communism in 1989 and replaces Zdenek Tuma, who will step down at the end of the month.

Czech monetary policy needs only “fine-tuning” with the benchmark two-week repurchase rate at a record-low 0.75 percent, Singer said after his appointment. The bank has cut the rate by 3 percentage points since June 2008.

“Singer’s appointment won’t change much in terms of the monetary policy outlook,” said Martin Lobotka, an analyst at Ceska Sporitelna AS in Prague, a unit of Erste Group. “It will be a slight shift from Tuma’s standpoint, who was more dovish, while now flexibility is going to dominate the policy-making process.”

The Czech koruna traded at 25.762 against the euro at 2:44 p.m., versus 25.704 the previous trading day, according to data compiled by Bloomberg.

Klaus, who delayed signing the European Union’s Lisbon Treaty last year and has opposed any move to quickly adopt the euro, has the chance to reshape monetary policy with the appointment of three more central bank board members when their terms end in February.

Tuma, 49, announced his resignation on April 15, almost eight months before his second six-year term was to expire. Tuma said he was leaving his post early to limit the period of “uncertainty” related to personnel changes at the bank.

Euro Adoption

The central bank has maintained its independence from political leaders, even though the president has the sole mandate to choose board members. It urged government spending cuts after the worst recession in 20 years, and policy makers have remained mostly neutral on adopting the euro.

Singer declined to comment on the timing for joining the euro. The country has no target date for the currency switch, though it is bound to make the change by its European Union accession agreement.

The new governor graduated from the Economics University in Prague and received a Ph.D. from the University of Pittsburgh in 1995. He worked at the Czech Academy of Sciences and was chief economist at Expandia Finance in Prague before joining the central bank board, according to the central bank’s website.

“His rhetoric is sometimes colorful, but that’s his style,” said Raffaella Tenconi, chief economist at Wood & Co. in Prague. “He’s an exceptionally qualified candidate who knows the bank and he will fiercely fight for its independence.”

Singer said he sees no reason to publish detailed results of bank stress tests in countries that don’t have problem with their lenders, the business newspaper Hospodarske Noviny reported today. He has also spoken out against EU plans for a bank tax designed to create a fund protecting the industry at times of crisis.

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