(Bloomberg) -- Hungarian Prime Minister Viktor Orban may announce his choices for central bank governor and a powerful economy czar in days, according to a senior minister, with finance chief Mihaly Varga the front-runner to take charge of monetary policy.
“I think we only have to wait a few days for the announcement of the names,” Economy Minister Marton Nagy told HirTV in an interview broadcast late Monday.
Varga has for months been considered the favorite to succeed Governor Gyorgy Matolcsy after Orban announced that he’ll merge the finance and economy portfolios. The prime minister has said either Varga or Nagy would become the next central bank chief, with the other taking over the so-called superministry for economic policy.
Varga is widely expected to be the tapped as central bank governor after the finance portfolio is eliminated as a separate entity. Nagy is considered to be Orban’s closest economic adviser — and the new role would give him an opportunity to deliver on a series of previously missed economic growth targets.
The next central bank governor will face the balancing act of keeping a lid on inflation while stabilizing one of the most volatile currencies in emerging markets, which is trading near a two-year low against the euro.
The task will be even harder given that the economy is mired in a recession and Orban is trying to stimulate it ahead of tightly-contested parliamentary elections in 2026.
It’s a job that’s likely to put the next governor in the government’s crosshairs. The currency weakness has already forced the central bank to halt monetary easing in recent months and to keep the key rate at 6.5%, tied with Romania for the highest level in the European Union.
Nagy, in the HirTV interview, said the key rate can “hopefully” be lowered as it’s currently running more than 3% above inflation, which he said was “not justifiable.”
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