June 20, 2019 / 1:05 PM / a year ago

Bosnia's presidency sacks two Serb members of central bank board

SARAJEVO (Reuters) - Bosnia’s tripartite presidency has sacked two Serb members of the central bank’s managing board, officials confirmed on Thursday, but the lack of an explanation of the decision raised concerns the move was politically motivated.

Bosnia’s inter-ethnic presidency appoints the members of the bank’s managing board and may dismiss them if they violate the law on the central bank, which manages monetary stability under the currency board arrangement pegging the Bosnian marka to the euro under a fixed rate.

The presidency session was convened on Wednesday but an official statement did not mention the decision.

A spokesman for the presidency chairman, Serb Milorad Dodik, confirmed the decision was made at Dodik’s request but could not say what the reason behind the move was.

The decision was made by two votes to one after Zeljko Komsic, the Croat presidency member, agreed, but there was no consensus on new appointments, Komsic’s cabinet said.

It added that Dodik had said the two board members were unfit to hold the roles.

The central bank declined to comment, saying they had not received any official note on the sackings.

The managing board consists of five members, three of whom come from Bosnia’s autonomous Federation dominated by Bosniaks and Croats and two from the Serb-dominated Serb Republic.

The two Serb members had been nominated by parties which are in opposition to the SNSD party headed by Dodik.

A Western diplomat who did not want to be named said he feared the move may undermine the independence of the central bank and advance nationalist agendas.

Neither of the two board members were reachable for comment.

Dodik has long tried to influence the central bank policy, insisting that the foreign currency reserves the bank keeps at major foreign banks should be diverted to support local firms.

Under the currency board arrangement, the central bank may only invest in securities of highly-rated euro zone countries that guarantee adequate capitalisation and liquidity.

Reporting by Daria Sito-Sucic; Editing by

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