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Simor rejects criticism by central bank supervisory board

The governor of the National Bank of Hungary (MNB) will not resign because of threats or intimidation, the central bank's head András Simor said on Monday. Simor spoke at an extraordinary press conference called to address a statement published by the MNB supervisory board late Friday saying salaries for MNB employees were not in line with international practices, and criticizing a public procurement for PR services and a communications advisor contract.

The MNB has always exercised prudence in the management of its operations, Simor said. The bank's management at present has in many instances achieved bigger savings than their predecessors, he added.

Simor firmly rejected the supervisory board's stand on the matters of wages and spending on communications. He said the central bank needed the best qualified creative thinkers, thus it must pay few people more rather than more people less.

Payroll costs of the MNB have dropped about one-third in real terms since the bank's current management took over in 2007 and average headcount has fallen some 25%, he added.

Addressing the supervisory board's stand that a tender for communications services worth HUF 427 million plus VAT was unnecessary, Simor said the tender was for services over a period of two and a half years’ worth HUF 285 million to be exceeded by no more than HUF 50 million.

Simor declined to comment on the nomination of two central bank rate-setters by Parliament's Economy and IT Committee on Monday. He said neither Parliament nor the committee had asked his opinion of the nominees and expressing it was not among the governor's duties.

"It would be neither ethical nor professional to comment on the nominations after the fact," Mr Simor said.

The new members of the MNB's Monetary Council will be welcomed with the greatest respect at the bank, Simor said. MNB officials regret that the new members will not be allowed to offer opinions on the first draft of the bank's next Inflation Report or on the outline of the Stability Report, he added.

Both will be discussed at a meeting on March 16, but the new members' mandates will start only on March 21.

The mandates of the four external members of the seven-member Monetary Council expired on March 1.