PRAGUE, April 15 (Reuters) - Czech central bank Governor
Zdenek Tuma will quit on June 30, ahead of the end of his
mandate in February next year, he said on Thursday.
Following are analysts's comments and market reaction:
MARKET REACTION:
The crown <EURCZK=> dipped 0.3 percent against the euro
<EURCZK=> after the announcement to a session low of 25.135 to
the euro before rebounding back to levels around 25.08 seen
before the announcement.
COMMENTS:
PETER ATTARD MONTALTO, EMERGING MARKETS ECONOMIST, NOMURA
INTERNATIONAL
"He was broadly neutral though in recent months has been a
little more concerned about deflation risks. The vice-governors
are a little more vocal in their views to hawkish and dovish
side so the balance of the MPC may shift slightly after June."
"However I really wouldn't read anything too dramatic into
this unless something dramatic comes up in press conference. Our
rates view is unchanged by this -- on hold till hikes begin
slowly in late H2."
VOJTECH BENDA, SENIOR ECONOMIST, ING, PRAGUE
"Theoretically, the most possible (replacement) will be one
of the two vice-governors. One reason we could favour, for
example, (Miroslav) Singer is he has been a senior member in the
board but his mandate expires in February 2011. So given
uncertainty of a future mandate, the second candidate would be
likely (Mojmir) Hampl."
"If the president wants to support continuity then it should
be one of the vice-governors... Singer has been longer in the
board, but Hampl became more visible over the past two years and
has commented in critical articles on the IMF which has likely
resonated with President (Vaclav) Klaus."
"I don't think the choice will change the market's view very
much... The real earthquake will be next year three people are
replaced on the board. That's the bigger uncertainty."
TATHA GHOSE, ANALYST, COMMERZBANK
"We don't see a very clear impact. We think interest rates
will rise by the year-end... We don't expect any kind of
tightening soon."
"The next senior people after Tuma are all of the same
opinion, mainly dovish. So we don't see a reconfiguration having
much of an impact over policy direction over the next four or
five months."
KOON CHOW, FX STRATEGIST, BARCLAYS CAPITAL
"This, according to Tuma, helps stagger the exit from the
7-member monetary board, which sets policy in the central bank.
This is a sensible move, and gives the market time to get used
to the new governor before existing members of the board leave.
Staggered exits should preserve some policy continuity. We see
little market implication from this decision: there is usually
strong consensus within the monetary board on interest rate and
FX decisions (Tuma was with 4 who voted for no change on rates
at the end of March) . This is unlikely to change."
LUBOS MOKRAS, ANALYST, CESKA SPORITELNA
"There is no reason for any disquiet, any doubts. I think
the market will digest this announcement very quickly.
"Governor Tuma was due to finish next year anyway, that
means that this is only an acceleration of what had been planned
before.
"The reason Tuma gave in his statement, that the governor's
mandate should be separated in time from the mandates of other
board members, is logical."
JAN VELMELEK, HEAD OF ECONOMIC AND STRATEGY RESEARCH,
KOMERCNI BANKA
"It is certainly a surprise but it makes sense. Tuma wants
to shrink the period of uncertainty. There has been speculation
in past weeks as to who would replace him."
"Moreover, a mandate of other members is finishing
simultaneously and the question is whether theirs would be
extended or not."
"The point is to lessen the uncertainty and negative impact
on markets... we'll know more after the news conference."
LARS CHRISTENSEN, CHIEF EM ANALYST, DANSKE BANK
"In terms of the majority on the board and in terms of the
outlook for monetary policy I don't really see a change in much.
We are on a neutral bias on monetary policy and that doesn't
change with Tuma's exit."
"The important thing would be to find somebody who has some
insight into monetary policy and therefore I think it would be
obvious to look among the present board members."
(Reporting by Jason Hovet and Jana Mlcochova)
