Czech central financial institution head says charges to remain excessive for a while By Reuters

PRAGUE (Reuters) – Czech rates of interest will keep comparatively excessive for a while and a reduce can’t be anticipated but with price inflation pressures from overseas nonetheless robust, central financial institution Governor Ales Michl mentioned on Monday.

Michl wrote in a commentary in each day Mlada Fronta Dnes (MfD) that demand pressures from the home financial system had been easing, with family consumption subdued, however pressures from overseas would keep vital into the primary half of subsequent yr.

He mentioned there was a risk of inflation staying increased for longer if cash development continued to rise strongly.

That may very well be attributable to deeper authorities funds deficits, or rising mortgage creation, he mentioned.

“We due to this fact want to cut back public finance deficits now, plus have our clear dedication to proceed within the struggle towards inflation till it’s totally underneath management, which means stabilised on the 2% goal,” Michl mentioned.

“That signifies that rates of interest will keep at a comparatively excessive stage for a while.”

The Czech Nationwide Financial institution (CNB) stored its key rate of interest steady for a 3rd straight assembly final Thursday and maintained a willingness to intervene in markets to forestall the crown weakening and complicating its purpose to convey down inflation, which hit 18% in September.

Michl repeated on Monday that the financial institution would think about steady charges or a hike at its subsequent sitting in December.