Czech National Bank Keep Interest Rates on Hold by 6 Votes to 1
The board of the Czech National Bank (ČNB) on Wednesday voted to keep interest rates at their current level. Despite the spike last month, inflation is expected to be within the 2% tolerance band. 6 board members backed this while one voted to raise rates by 0.25 basis points. Photo credit: Zenon Moreau.
Brno, Jul 1 (BD) – Jiří Rusnok, the bank Governor, explained at a press conference their reasoning and how they see the next few months.
Last month’s upturn in inflation was attributed mainly to seasonal food factors and the bank expects the rate to return to the 2% level in Q1 2020. Therefore they don’t see this as a reason to increase interest rates.
growth is expected to remain at around the 2.5% level for the rest of the year
and then edge up towards 3% in the first quarter of next year. This was broadly
in line with expectations although the level of household and government
consumption rose faster than expected.
market remains tight with the number of vacancies falling in the first quarter
and wages rising slightly faster than expected.
crown averaged 25.7 crowns to the Euro, which was weaker than expected by 0.20
CZK. However, the bank forecasts the crown to strengthen and reach the 25 crown
to the euro level in early 2020.