(Bloomberg) -- Poland has no reason to rush the appointment of a replacement for central bank Governor Slawomir Skrzypek, who died in the April 10 plane crash that also killed the nation’s president, said Bronislaw Komorowski, the parliamentary speaker who’s assumed presidential duties.
His comments contradicted a call for an immediate appointment to maintain continuity of monetary policy by a former central bank policy maker.
“Unless a new governor is nominated and confirmed by parliament, there won’t be any way to call the next rate meeting” scheduled for April 27-28, Dariusz Filar, an economic adviser to Prime Minister Donald Tusk, told TVN CNBC television today. “Choosing a new governor is vital to ensuring policy continuity in Poland.”
The central bank on April 9 intervened in the currency market for the first time since 1998, buying euros to curb the zloty’s gains after a 6 percent increase this year. Decisions on interest rates and currency policy are made by the Monetary Policy Council, which has 10 members, including the governor, who presides over policy meetings and casts a tie-breaking vote.
The bank had also signalled it was deciding when to start raising rates from a record low 3.5 percent. It left the benchmark seven-day reference rate unchanged on March 31, expecting inflation to slow to 1.4 percent by the third quarter, below its 2.5 percent target-range midpoint.
EU Mechanism
“Uncertainty should be out of the way by June and we stick for now with our call of three rate hikes from July, but with risks to the downside given prospects of further intervention,” said Peter Attard Montalto, an emerging markets economist at Nomura International Plc., in a note. He expects the country to join the pre-euro Exchange Rate Mechanism, a prelude to adopting the euro, in 2011.
Poland abandoned its 2012 euro adoption target in July after it became clear it would miss the bloc’s fiscal targets. Tusk says 2015 is a “realistic” date.
Potential candidates for the governorship include Tusk’s senior economic adviser, Jan Krzysztof Bielecki, a former premier and ex-head of the country’s second-largest bank, Pekao SA, said Rafal Benecki, a senior economist at ING Bank Slaski in Warsaw. Also under consideration may be Andrzej Bratkowski, a former deputy governor who sits on the MPC; and Jerzy Pruski, also a previous deputy governor.
“The best thing would be to find someone right away to preserve the stability and credibility of the central bank,” Benecki said. “The most likely candidate is Bielecki, because he has political experience and support. Right behind is Bratkowski, who has the know-how to step right into the job without missing a beat.”
Deputy Governor
The governor’s duties are being handled by Deputy Governor Piotr Wiesiolek, 46, who joined the management board in March 2008. A former analyst and fund manager for Deutsche Bank AG and JP Morgan, he was hired at the central bank’s foreign operations department between 1992 and 1996, where he dealt with security portfolios management. Before becoming deputy governor, he was deputy chief executive officer of Bank Ochrony Srodowiska SA.
“Undoubtedly Wiesiolek is very competent so the markets shouldn’t be concerned about the continuity of the central bank’s operations,” said Urszula Krynska, an economist at Bank Millennium in Warsaw.
Other candidates may be former policy makers Boguslaw Grabowski and Dariusz Filar and Finance Minister Jacek Rostowski, wrote Jana Krajcova, an analyst at Ceska Sporitelna, in an e-mailed comment.
‘Delicate Issue’
The naming of a new governor “is an extremely delicate issue in the current circumstances,” said Monika Kurtek, an economist at Bank BPH. “I think the appointee will not be anyone closely related with the ruling Civic Platform. This would simply be politically incorrect.”
The MPC agreed today that Wiesolek will temporarily lead the council until the new governor of the central bank is appointed, Anna Zielinska-Glebocka, a member of the MPC said by phone after the meeting, adding that the decision was based on a legal interpretation of existing regulations.
Komorowski, who assumed the duties of President Lech Kaczynski after the crash and is empowered to choose Skrzypek’s succesor, said at a Warsaw press conference today that “there is no need to rush with the appointment of the bank’s governor.”
Some economists and analysts said he may delay the appointment to avoid any appearance of usurping the deceased president’s legacy.
‘Tough Spot’
“Komorowski and Civic Platform are in a very tough spot,” said Radoslaw Markowski, a professor of politics at the Polish Academy of Sciences. “One wrong word or bad appointment and the public mood could swing against them.”
The central bank governor is appointed by the president and must be approved by a simple majority of lawmakers. As acting president, Komorowski, who is also the official presidential candidate of Tusk’s ruling Civic Platform party, is entitled to name a candidate without waiting for presidential elections, said Piotr Winczorek, a professor of constitutional law at Warsaw University.
The zloty closed at 3.868 per euro, up from its Friday’s close of 3.872. The WIG20 Index of shares climbed 1 percent, extending gains in 2010 to 8 percent.
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