UPDATE 4-Colombian president names two to central bank board

Thu Feb 21, 2013 12:26pm EST

* Ana Fernanda Maiguashca, Adolfo Meisel named to bank's
board
    * New members will not participate in Friday policy meeting
    * Experts see the two as more inclined toward rate cuts


    By Helen Murphy and Luis Jaime Acosta
    BOGOTA, Feb 21 (Reuters) - Colombian President Juan Manuel
Santos on Thursday named deputy finance minister Ana Fernanda
Maiguashca and central bank economist Adolfo Meisel to replace
two outgoing members of the bank's board of directors.
    Colombian monetary policy may lean more toward expansion
after Santos picked two economists seen as having softer views
on the impact of inflation on the economy and so may be more
inclined to lower the benchmark interest rate.
    The new board members cannot participate as co-directors in
Friday's monetary policy meeting because a decree needs to be
issued and they need to be sworn in. The board can vote on
interest rates with five members.
    "The new members are likely to remain aligned with the more
dovish side of the bank's board led by Finance Minister Mauricio
Cardenas, allowing the government some additional capacity to
influence monetary policy," Barclays Capital said in a research
note to investors.
    Maiguashca, 38, a graduate of Columbia University in New
York, would be the first woman on the panel since 1991. Until
her new posting she was a vice finance minister.Meisel, 59, is head of the central bank's branch in the
coastal city of Cartagena and has a doctorate in economics from
University of Illinois, Urbana-Champaign."Maiguashca is one of the greatest experts in the country on
financial regulation and supervision. Adolfo Meisel has devoted
a lifetime to the study of the problems of the Caribbean coast,"
Finance Minister Mauricio Cardenas said in a message on Twitter.
    Policymakers are named to the board for a period of four
years that can be renewed twice by the government. 
    While the youthful Maiguashca was identified by Reuters
sources as "very probably" a new member, Meisel's choice
surprised the market as he had not been considered a possibility
- experts see both members as more inclined toward rate cuts.
    
    The board has cut the key lending rate in the last three
policy meetings, taking it to 4 percent in the longest easing
cycle since 2009. Economists expect another quarter-point
reduction on Friday. 
    With inflation at a three-year low, some board members
called last month for further expansion after slashing 125 basis
points since July of last year. 
    Santos's appointments replace Fernando Tenjo and Juan Jose
Echavarria whose terms have expired.
    The new board will face the task of stimulating a slowing
economy while controlling inflation and preventing a strong
currency from damaging manufacturing and exports.
    The central bank has been independent under the constitution
for 21 years, when it was given the primary task of constraining
consumer prices and setting targets. 
    By giving the president's office just three seats, including
the finance minister, the board's autonomy is assured.
    While the panel, headed by orthodox economist Jose Dario
Uribe, has mostly ignored pressure from successive governments,
Santos will get another chance to pick two seats if he is
reelected in 2014, bringing to five his appointees on the board.
    In addition to Maiguashca, Meisel, Uribe and Cardenas, the
board currently includes Carlos Gustavo Cano, Juan Pablo Zarate
and Cesar Vallejo.
A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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