Hungary central bank deputy governor quits in protest

The deputy governor of Hungary's central bank resigned on Monday in protest at "damaging" changes made since the appointment of a loyal ally of Prime Minister Viktor Orban as its head.

Julia Kiraly said that new practices introduced since Gyorgy Matolcsy became governor of the MNB last month "would damage the bank's prestige earned over long years in Hungary and abroad".

"Increasingly unfounded and mistaken decisions can cause serious damage not only to the MNB but to the Hungarian economy in the longer term," she wrote in a resignation letter distributed to journalists at a press conference.

Her departure removes the last member of the central bank's monetary policy council not to have been appointed by Orban and his right-wing Fidesz party since sweeping to power in 2010.

The appointment of Matolcsy, seen as something of an economic maverick, heightened concerns about the independence of the central bank, one of several key institutions that critics say are now under greater government control.

Kiraly, whose six-year mandate was set to expire in July, said that under Matolcsy, several key staff have been removed and that the amount of time that the monetary policy committee has to consider interest rate policy had been cut.

The 55-year-old also criticised the new management for cancelling the regular news conferences that followed monetary policy announcements and pulling out of professional forums and conferences.

Last week she refused to vote on Matolcsy's first major policy announcement -- a programme of low-interest loans for small and medium-sized companies -- because she said there was insufficient time to consider it.