Czech President to Name Rusnok Colleagues to Central Bank Board

Updated on
  • Benda, Nidetzky both worked with future board chief at ING
  • Three will probably form voting bloc on policy, Kocourek says

Czech President Milos Zeman picked two economists with ties to future central bank Governor Jiri Rusnok to join the rate-setting board, giving him potential allies as policy makers deliberate a smooth exit from the bank’s cap on the koruna.

The president tapped Vojtech Benda, 40, a former chief economist at the Czech unit of ING Groep NV and current adviser to Rusnok. Tomas Nidetzky, 46, is an executive at the Prague-based branch of NN Groep NV, a former insurance arm of ING. Both, former colleagues of Rusnok, will be appointed on Tuesday, Zeman’s office said in an e-mailed statement on Monday.

The appointees signal continuity in the Czech National Bank’s two-and-a-half year policy of reining in koruna gains at about 27 per euro after Governor Miroslav Singer and board member Kamil Janacek leave the board at the end of June. They also indicate Zeman, who has criticized the koruna-capping policy in the past, has decided to give Rusnok a free hand in guiding the bank’s future policy, said Jakub Seidler, a former analyst at the central bank and now an ING economist in Prague.

“Both new members are Rusnok’s former colleagues at ING, and their appointment suggests that President Zeman is giving Rusnok a lot of freedom to choose,” Seidler said by e-mail. “The position of the upcoming CNB governor within the bank board will be very strong.”

Voting Bloc

Rusnok has been a supporter of the policy championed by Singer, under which the board has kept the benchmark rate at a “technical zero” of 0.05 percent since November 2012 and intervened against the koruna a year later to fuel price growth. Nidetzky, who Seidler said was a surprise choice, has experience from the insurance industry. That may help Rusnok deal with new regulation and licensing procedure, according to David Kocourek, an economist at Komercni Banka AS in Prague.

“With Benda, Governor Rusnok will get a loyal co-worker who shares his views on the economy and the functioning of the central bank,” Kocourek said by e-mail. “It’s very likely they will form a unified voting bloc withing the board.”