CNB Governor Rusnok wins award for smooth exit from exchange rate commitment

Czech National Bank Governor Jiří Rusnok has been named Central Bank Governor of the Year for Central and Eastern Europe 2017. The award has been bestowed on him by GlobalMarkets, the newspaper of record at the annual meetings of the International Monetary Fund and the World Bank. The judging committee highlighted the smooth exit from the exchange rate commitment, including the careful preparation and effective communication of this move. The CNB’s financial stability policy was also praised.

(video with English subtitles)

“I view this award as recognition of how we followed up on the unique work of the previous Bank Board by transparently signalling announcing the end of our foreign exchange interventions. I consider it to be additional acknowledgement of our unorthodox monetary policy, which we have often been criticised for here in the Czech Republic. It’s an award not just for the Bank Board, but for all the CNB’s experts. Choosing the right form and timing of the exit from the exchange rate commitment was no less easy than introducing it. I believe that with its monetary policy and financial stability policy, this institution will maintain its reputation of one of the most progressive central banks in the world, one which, if necessary, is not afraid to swim against the tide,” said Governor Jiří Rusnok, summing up his feelings on accepting the award in person in Washington, D.C. today.

The CNB took the decision to stop the koruna appreciating beyond CZK 27 to the euro in November 2013. This came one year after it had pushed its key interest rate down close to zero, thereby exhausting the room for further easing monetary policy in the traditional way. The CNB became only the third central bank – behind those of Israel and Switzerland – to use the exchange rate as a monetary policy instrument. The CNB ended this regime in April 2017 without inducing any major market fluctuations.

“Careful management of the removal of the cap on the koruna in April, including a commitment to timely communication, ensured that Czech Republic avoided a Swiss-style market shock. Macroprudential measures to curb consumer lending have also won plaudits for helping to prevent a real estate bubble while at the same time maintaining the profitability and sustainability of the banking sector,” said the Managing Editor of GlobalMarkets Toby Fildes, who chaired the judging committee.

The CNB has responded to the emergence of an upward spiral between property prices and demand for mortgage loans over the last two years by tightening its recommendations regarding mortgage lending by banks.

GlobalMarkets (formerly known as EmergingMarkets) is an international specialist newspaper published by Euromoney Trading Ltd. Since 2004, the GlobalMarkets Award has been presented to the best finance ministers and central bank governors from emerging markets. These markets include five other regions besides Central and Eastern Europe, such as South-East Asia and Latin America. The award was also won by former CNB Governor Miroslav Singer in 2013. In 2014, he received the Central Bank Governor of the Year in Europe award for the exchange rate commitment from the renowned monthly magazine The Banker published by the Financial Times Group. A year later, the CNB won the prestigious Central Banking Transparency Award for its openness and use of new communication tools.

Marek Zeman
Director, CNB Communications Division