Hungarian banker Buza, economist Kovacs to join central bank monetary council - sources

·2-min read

By Gergely Szakacs

BUDAPEST (Reuters) - Hungary's ruling Fidesz party will nominate banker Eva Buza and economist Zoltan Kovacs to fill two expiring seats on the central bank's rate-setting Monetary Council next week, two sources familiar with the matter told Reuters.

The sources confirmed a local media report that named the two candidates on Tuesday.

Parliament's economic affairs committee, which is in charge of the nomination process, will hold a confirmation hearing of the two candidates on Monday, according to the agenda of the meeting published on parliament's website.

The hearing is likely to be a formality, given Prime Minister Viktor Orban's two-thirds majority in the legislature. The new members will succeed economists Bianka Parragh and Gyorgy Kocziszky, whose terms will expire in late March and early April.

The nine-strong Monetary Council of the National Bank of Hungary has made its decisions unanimously over the past years, so the new appointments are unlikely to swing the balance of power within the rate-setting board.

However, the new appointments come at a time of turmoil in global financial markets and as the central bank faces increased pressure from Orban's government to start lowering interest rates amid a sharp economic slowdown.

Investors will closely follow Monday's introductory remarks by the new members for clues on whether they share the government's view that inflation will fall quickly and that interest rate cuts are needed to help the economy.

Any such indication would be the major first sign of discord within the panel since the resignation of former deputy governor Marton Nagy, currently a top Orban aide, three years ago.

The central bank will hold its next monthly policy meeting on Tuesday.

Buza, the head of state credit guarantee firm Garantiqa Hitelgarancia Zrt., has worked at state-owned businesses for more than two decades, including state railways company MAV and Hungarian Development Bank MFB.

Kovacs has worked for several Hungarian brokerages and banks as well as the Hungarian Postal Service.

(Reporting by Gergely Szakacs; Editing by Bradley Perrett)