Business

Hungary central bank deputy in protest resignation

  • 8 April 2013
  • From the section Business
Gyorgy Matolcsy
Julia Kiraly said bank governor Gyorgy Matolcsy's changes could damage confidence

The deputy governor of the Hungarian central bank, Julia Kiraly, has resigned in protest at changes to the way the bank operates.

She said new governor Gyorgy Matolcsy's changes could harm confidence.

When Mr Matolcsy was appointed last month, he reshuffled support staff and cut the time given to council members to review policy decisions.

Mr Matolcsy, who is close to Hungary's prime minister, also cancelled news conferences that follow policy changes.

Ms Kiraly last week refused to vote for a stimulus package, citing lack of time.

She said she was being rushed to make a decision and had been given 35 minutes to read through a 40-page document before it was debated and voted upon.

The meeting last week ushered in stimulus measures of more than $2bn, including what Mr Matolcsy called a "Funding for Growth Scheme'', based, he said, on a similar scheme introduced last year by the Bank of England.

Ms Kiraly, who is the only person on the policy board who was not appointed by either prime minister Viktor Orban or his Fidesz party, said the changes could lead to a loss of confidence in the bank and damage the economy.

She said in her resignation statement that she was leaving "to signal the seriousness of the situation" at the bank since Mr Matolcsy, a former economy minister, became governor.

She went on: "Decisions have been made that could cause serious damage, not only to the National Bank of Hungary, but in the longer term, also to the Hungarian economy."

Mr Orban has been criticised by some investors, as well as the International Monetary Fund and European authorities, for bringing in policies that are designed to boost Hungary's economy, but that some say could destabilise the economy.