Denmark has picked Christian Kettel Thomsen, 63, as its new central bank governor to defend the strengthening Danish krone’s peg to the euro.
(Bloomberg) — Denmark has picked Christian Kettel Thomsen, 63, as its new central bank governor to defend the strengthening Danish krone’s peg to the euro.
The economist, currently a vice president at the European Investment Bank, will start Feb. 1 and oversee the central bank’s main policy mandate of upholding the peg through monetary-policy tightening by the European Central Bank.
That is likely to entail interest-rate increases in Denmark, though the Nordic country has so far hiked less than the ECB to prevent its currency from ascending further. The Danish central bank may be forced to stick with that tactic during 2023, according to some economists.
Kettel Thomsen’s appointment was published by the business ministry on Friday. He succeeds Lars Rohde, 68, who announced in September plans to retire in early 2023.
The choice of Kettel Thomsen is “slightly surprising” since he doesn’t have experience working with monetary policy, said Steen Bocian, chief economist at Borsen, Denmark’s largest financial newspaper. Still, he will benefit from his political clout and his strong network from his time as a civil servant which will help the central bank maintain its influence, Bocian said.
During his tenure, outgoing Governor Rohde oversaw the longest negative-rate experiment in history, which started in 2012. The central bank’s key interest rate went positive late last year as Nationalbanken tracked rate hikes by the European Central Bank. He has recently identified high inflation as the biggest threat to the AAA rated economy — it’s struggling with price increases close to 10%, but the central bank has no inflation target.
A 2016 Danish media profile of Kettel Thomsen portrayed him as hard working, thorough and a problem solver. The piece in Altinget, based on interviews with his friends and former colleagues, also characterized him as calm and somewhat quiet and introverted, especially when he was younger. He has previously been the highest-ranking civil servant at both the Danish prime minister’s office as well as at the finance ministry.
When Kettel Thomsen was a teenager, he worked for a few years as a ship’s cook at Denmark’s biggest company, A.P. Moller-Maersk A/S, before gaining an economics degree at the University of Copenhagen.
Kettel Thomsen “lacks market experience,” Jens Naervig Pedersen, chief analyst at Danske Bank, said. “But we do not see this as a big issue. In our view, he is a safe pick for new governor.”
–With assistance from Thomas Hall and Jonas Cho Walsgard.
(Updates with economist comments from fifth paragraph)
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