The Governor of the Central Bank Patrick Honohan is to retire early. A formal announcement is expected at the publication of the bank's annual report today.

Patrick Honohan was appointed to the role of Governor in September 2009 and was to serve a seven year term. But he will now retire by the end of this year, meaning he will leave the post up to a year early.

The Central Bank is making little comment on the matter ahead of the press conference, other than to say it is a "personal decision".

Sunday Business Post's markets editor Ian Guider joined Newstalk Breakfast to discuss the move - he thinks that tensions between the Government and the Central Bank could have played a part in his decision.

He added that Ireland will face a tough challenge to replace Mr Honohan.

The Central Bank's annual report will be launched today at 11:00am.