Ales Michl.
Ales Michl, a 45-year-old graduate of the University of Economics, has become the new governor of the Czech National Bank. He will take office on July 1st of this year. There are somewhat vague expectations for him. After the first mention of the likely appointment, financial markets reacted with a fall in the koruna. Given that such reactions are of a rather emotional nature and do not last long, it is not necessary to attach too much weight to them. What is more interesting is what can be inferred from Ales Michl's first words after the inauguration. Despite his apparent nervousness, he did not fail to confirm Miloš Zeman's critical remark stressing the failure of interest rate rises to curb inflationary trends. Michl identified his main task as stabilising the CNB's stance and reducing the repeated use of interest rate hikes as the most visible anti-inflationary instrument used so far. It is certainly correct to mention that Aleš Michl was an economic advisor to former Prime Minister Babiš, and before that, since 2014, he was an external advisor to the Ministry of Finance of the Czech Republic, led by the same person. Since December 1, 2018, he has been a member of the CNB Bank Board by appointment of the President of the Republic. And now he is the new governor. He is one of those economists who are far from viewing the fiscal policy of the state through a populist lens, as can be seen both from his voting record on the board and his engagements between 2014 and 2018. Given the balance of power on the seven-member board, there is no reason to expect an immediate change of direction, but the "Michel" signal is a precursor to the renewal of the other two members of the board. This may already bring a turn in the course of sailing through the choppy waters of the European and global economy. The CNB's main task is to influence the price level in a positive and appropriate way, not to allow uncontrollable inflationary tendencies and to guard the Czech currency's strength and position. In two months' time, this will be the task for the team led by Ales Michl.
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