At a press conference late Friday afternoon, Hungarian Prime Minister Ferenc Gyurcsany announced he had appointed Andras Simor, CEO of Deloitte in Hungary, as the new central bank governor to succeed the outgoing Zsigmond Jarai.
Simor’s appointment should not come as a surprise to the markets, as he has been the top candidate for a long time. It is also positive that PM Gyurcsany has appointed a well qualified economist instead of going for a more partisan choice.
Looking ahead, we would expect Mr Simor to be a moderate vote on the central bank’s Monetary Council, but he will likely vote for a rate hike if inflationary pressures increase.
All in all, today's announcement should be fairly neutral for the Hungarian market, though it may gain a bit, as the appointment ensures an undramatic change of leadership at the Hungarian central bank.
We welcome Mr Simor and wish him the best of luck with carrying on the anti-inflationary policy implemented during Mr Jarai’s term as governor. Inflation seems set to rise further in Hungary on the back of higher indirect taxes and reduced subsidies, so Mr Simor joins the bank at a challenging time.
