UPDATE 1-Czech president to appoint former PM Rusnok to central bank

Tue Feb 4, 2014 7:52am EST

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PRAGUE Feb 4 (Reuters) - Czech President Milos Zeman is to appoint former Prime Minister Jiri Rusnok to the central bank board on Wednesday, his first personnel change at the bank as it tries to help the country to return to growth after a record-long recession ended last year.

Zeman, who won the country's first direct presidential election a year ago, is set to make a total of five appointments to the board during his term, which could make the bank more open to adopting the euro in the coming years.

Zeman appointed Rusnok, a 53-year-old economist, as caretaker prime minister after the collapse of a centre-right government in June last year but he lost a confidence vote in the lower house, which led to an early election.

His appointment comes at a pivotal time for the bank. With interest rates at near zero, policymakers decided in November to use interventions to weaken the crown currency for the first time in more than a decade to fight the threat of deflation.

Rusnok told Reuters in an interview last month that he supported the bank's decision to use the crown to loosen monetary policy and said an exit from the policy was still "far ahead of us".

The president said in December he would name his longtime ally to replace Eva Zamrazilova whose term ends in March. Zamrazilova had expressed caution over launching interventions.

The president's office said Rusnok would join the bank's seven-member board from March 1.

Former President Vaclav Klaus, a vocal eurosceptic, appointed the current board and the bank has been cool to adopting the euro, which the Czech Republic pledged to do eventually when it joined the European Union a decade ago.

Any decision to swap crowns for euros is up to the government, with the bank playing an advisory role.

Rusnok said in the interview the public needed to get rid of "prejudices" against the euro zone and that joining the currency bloc would be realistic around 2020. (Reporting by Robert Muller; Writing by Jason Hovet; Editing by Alison Williams)

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