Thursday, October 8, 2009

Romania parliament holds vote to reappoint Isarescu

BUCHAREST, Oct 8 (Reuters) - The Romanian parliament votes on Thursday to appoint long-serving central bank governor Mugur Isarescu for another term in office, a move likely to reassure markets jostled by a government crisis.

Since taking over the helm of the central bank just months after Romania's bloody anti-communist revolt in 1989, Isarescu has gained a reputation for steady policymaking and a pro-reform stance that helped the country join the European Union in 2007.

One the world's longest-serving central bankers, the 60-year-old has held the post ever since, with a brief stint as prime minister between 1999 and 2000.

He is widely supported by political groupings and praised at home and abroad for conducting policy with a steady hand. He offers welcome change in Romania, where policy-making often falls victim to political power struggles.

'Isarescu has been a factor of stability throught the whole post-revolution period,' said Ionut Dumitru of Raiffeisen Bank in Bucharest.

'His reappointment offers markets and investors a guarantee that his line will continue to be implemented.'

A government crisis further endangered economic performance this week after a split in the ruling coalition raised concerns over Romania's ability to meet terms of a 20 billion euro aid package led by the International Monetary Fund.

His response to the global financial crisis won accolades, with the International Monetary Fund crediting him for resisting the temptation to slash interest rates aggressively, a move that in Hungary hammered the forint, weakening financial stability.

However, some economists criticise him for being slow in introducing inflation-targetting and for hurting the bank's credibility by dabbling too much in exchange rate management and by missing three out of four inflation targets since 2005.

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