The ECB - already leading the charge for higher interest rates among the world’s major central banks, having boosted its key rate by a quarter-point last week - looks set to take on yet another staunchly hawkish decision-maker in January when Slovakia joins the euro-zone.
Slovak central bank governor Ivan Sramko is expected to bring with him the strong anti-inflation bias that helped gain his country’s acceptance into the euro zone when he joins the European Central Bank’s governing council in January.
Slovakia is also almost certain to be the last new entrant to provide a member of the ECB governing council for several years to come as other prospective members, including Poland and the Czech Republic, are unlikely to join the euro-zone before 2012...
In May 2006, over year into his job at the helm of the Slovak central bank, Sramko started a monetary policy tightening cycle to tame inflationary pressures. The bank’s benchmark two-week repurchase agreement rate went from 3% to 4.75% in March 2007.
During the same period the Slovak koruna firmed over 12% against the euro, intensifying further interest rate hikes.
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