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Gov't submits amendment changing rate-setter appointments

The government submitted to Parliament on Thursday an amendment that would change the way the National Bank of Hungary's rate-setters are chosen.

The amendment would give the power to appoint the four external members of the NBH's Monetary Council to a parliamentary committee. At present, the power is shared by the prime minister and the central bank governor. The Monetary Council's internal members are the central bank governor and his two deputies.

The changes to the Central Bank Act are necessary to “further improve the soundness of decisions and broad assessments of different viewpoints” by the Monetary Council's four external members, the purpose of the amendment states. The change is a “significant move closer to European Union practice”, it says.

The amendment is to come into force immediately after it is approved. Parliament will hold its next session on February 14.

In an opinion published in mid-December, the European Central Bank expressed “concern” over the draft changes to the Central Bank Act. The changes to legislation, considered with the government's repeated criticism of the central bank's rate decisions “could be seen as the government trying to influence the governor in the performance of his tasks,” the ECB said.

In a statement made a week after the ECB published the opinion, the ministry said the ECB had not made any substantial objections to the proposed changes affecting the NBH. (MTI Econews)