In Box

The Euromoney Curse

Sports fans speak of a "Sports Illustrated jinx." As soon as an athlete or team makes it onto the cover of the popular weekly, calamity strikes, whether in the form of a decline in performance, injury, or even death. Readers of Hello!, the British gossip magazine, note that celebrity couples frequently break up after their ...

Sports fans speak of a "Sports Illustrated jinx." As soon as an athlete or team makes it onto the cover of the popular weekly, calamity strikes, whether in the form of a decline in performance, injury, or even death. Readers of Hello!, the British gossip magazine, note that celebrity couples frequently break up after their weddings are featured in its pages. Now comes growing evidence of a new magazine-related affliction: The Euromoney curse, which seems to strike those who have been nominated as the magazine’s central banker of the year.

Consider the case of last year’s winner, Tito Mboweni. Since being honored by the London monthly in September for his work as governor of the South African Reserve Bank, Mboweni has watched the rand plummet, losing almost 30 percent of its value against the dollar. Convinced that the currency’s volatility is due to "sentiment and opportunism," Mboweni has done little to stop its slide. Ironically, in praising Mboweni’s work, Euromoney enthusiastically endorsed this hands-off approach, embodied in the governor’s belief that the rand "can find its own level."

Now, with local citizens saving more and more money in foreign banks and the instability of neighboring Zimbabwe scaring away investors, Mboweni is finding it increasingly difficult to stabilize the South African economy. And while politicians and economists alike are pinning much of the blame on "speculators," Mboweni’s inaction has led one editorialist to note, "It’s difficult not to compare our rotund central bank governor to the Roman Emperor Nero fiddling as the rand continues to drop off the radar screen."

Perhaps Mboweni should be thankful that he still has a job. Praised by Euromoney in September 2000 as the "Indiana Jones of central bankers," Gazi Ercel of Turkey was forced to resign just five months later, after the failure of a reform program originally implemented with the blessing of the International Monetary Fund. In January 2002, a prosecutor brought charges against Ercel for misuse of power, claiming that the former president of Turkey’s Central Bank had converted most of his savings into dollars on the eve of the Turkish lira’s fall. Although some argue that he is only taking the blame for an inevitable collapse, Ercel was the most ardent supporter of a "crawling peg" exchange rate — also praised by Euromoney — which his critics say contributed to the nation’s financial crisis.

Euromoney declined to comment on the connection between its honorees and misfortune, although clearly Mboweni and Ercel faced circumstances largely out of their control. Yet perhaps a word of advice is in order for those who hold the currency of next year’s honoree: sell.

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