Matt Atlas

CNB Vice-Governor Backs Rate Increase


Central bank Vice-Governor Marek Mora is ready to back a 25-basis-point increase in interest rates at next week’s monetary policy meeting if new economic forecasts support further tightening, he said in an interview.

With price pressures still coming from the growing domestic economy, Mora could be the swing vote in favour of an increase that would bring the two-week repo rate to 2.0 percent for the first time in a decade.

The bank’s seven-strong board meets on May 2, when a new quarterly staff forecast will be available. The bank raised rates five times last year but paused in December as it weighed a slowdown in Europe against the strong domestic economy.

“For me personally, the calculation turns out slightly in favour of raising interest rates,” Mora said on Wednesday.

“If the new forecasts proposes that, I will be in favour, although Im probably more than some others, perceive the risk that the development abroad can affect us faster and harder than the model assumes.”

Two board members, Vojtech Benda and Ales Michl, have voted for an increase at the most recent meetings. Another rate setter, Tomas Holub, told Bloomberg last week he believed there was room for an increase in the first half, which will include one more meeting, on June 26, after the May sitting.

Governor Jiri Rusnok said in an interview for released on Wednesday the bank remained on a “thin edge” between stable rates and an increase going into next week’s meeting.

Of the seven rate increases in a cycle going back to 2017, five came at meetings where a new forecast was discussed.

Via Reuters