PRESIDENT Tassos Papadopoulos yesterday named Athanasios Orphanides as the new Central Bank boss to succeed long-serving Christodoulos Christodoulou, just hours after the incumbent announced he would not be seeking a renewal of his term.
Orphanides’ five-year tenure begins in May.
Aged, 45, the incoming governor currently sits on the board of governors of the US Federal Reserve System. He has worked as research associate with the Centre for Financial Studies in Frankfurt, London’s Centre for Economic Policy and Research, and the Kiel Institute for World Economics.
He studied economics and mathematics in the United States, receiving a post-graduate degree in Economics from MIT in 1985. In 1990, he was awarded a doctorate in Economics.
Orphanides has co-authored books on macroeconomic and monetary policy.
He is married with two children.
The appointment put an end to speculation that the incumbent, Christodoulou, might have served an additional term.
Earlier in the day, Christodoulou declared that he would not be available for re-appointment, pre-empting rumours that President Papadopoulos would not be renewing his contract.
According to a statement released by Christodoulou, he had informed the president of his decision.
“The president, after two letters I have sent him on February 16 and February 26, is fully aware of my final decision that I am not going to be a candidate for re-appointment to the post of Central Bank Governor after my contract expires,” he said in a statement yesterday.
Christodoulou added that he had met Papadopoulos on two occasions, on April 2 and April 11, where they discussed a number of issues including the adoption of the euro on January 1, 2008.
“The first letter I sent on February 16 told the president that he should find a replacement for the role of Central Bank Governor after the expiry of my contract on April 30,” he said.
“I considered it my duty and obligation to inform the President, who has so many things on his mind and may have forgotten that my tenure is ending. I did this so that he can appoint someone else in time because of the importance of the role of the Central Bank and especially now with our upcoming entry into the euro zone,” he added.
Analysts said the departure would not impact monetary policy. “It’s all textbook from here,” said a dealer at commercial bank in Nicosia, referring to the months leading to euro adoption on January 1.
The Central Bank Governor cited “personal reasons” for his decision and will be giving a press conference on April 24 where he will be presenting the annual financial results of the Bank, though it was understood that he had been keen to continue in the job, and only stood down when it became clear he was going to be replaced.
Christodoulou declined to comment on whether Tassos Papadopoulos had asked him to give his opinion on who should be his successor, adding that he would continue to give 100 per cent until the day his contract expired.
Rumours had been circulating that the president was not intending to renew Christodoulou’s contract and would be appointing someone else to the post.
Christodoulou had come under severe criticism for his family’s involvement in a company that was responsible for preparing bank employees for banking examinations. The Institute Banking of Studies (IBS) is partly owned by A.A.V.K Promotions Limited, a company which had been in the hands of Christodoulou’s daughter.
Christodoulou made the announcement after a meeting at which the Central Bank kept interest rates on hold, leaving the refinancing rate at 4.50 percent, 75 basis points above its European Central Bank equivalent.
Cyprus needs to align its interest rates with those in the euro zone in its preparations to adopt the single currency next year though market watchers said the Central Bank was not likely to move swiftly while EU rates looked set to increase.
The present premium that Cyprus’ key rate has over ECB rates could be eliminated or narrowed with anticipated rate increases in Europe this year.
The ECB on Thursday kept its refi rate on hold at 3.75 per cent, as expected, and cemented market expectations for a June rate hike to keep euro zone inflationary pressures in check.
