© Reuters. FILE PHOTO: The Czech Nationwide Financial institution is seen in Prague, Czech Republic, April 26, 2023. REUTERS/David W Cerny
PRAGUE (Reuters) – Elevating the Czech Nationwide Financial institution’s rates of interest additional would nonetheless make sense because it might function a sign that the central financial institution has not given up on its efforts to tame inflation, board member Tomas Holub mentioned on Sunday.
The central financial institution has saved its most important rate of interest at 7.00% since final June when it delivered the final hike in a year-long tightening cycle.
“The scenario that charges have been unchanged for a very long time makes individuals assume that the central financial institution just isn’t doing sufficient, and from my perspective even the sign impact of an additional enhance in rates of interest can be vital,” Holub mentioned in a televised debate.
When requested if a hike would make sense on the subsequent financial coverage assembly on June 21, Holub, who has persistently backed fee hikes, mentioned sure.
“If now we have the chance of a wage-inflation spiral right here, then sending the sign remains to be significant to me,” Holub mentioned.
The central financial institution expects inflation, which eased to 12.7% year-on-year in April, to return down nearer its goal early in 2024.