(Adds governor's quote, background)
PRAGUE, Feb 13 (Reuters) - The Czech National Bank does
not expect wage growth to exceed 10% this year, a level seen as
a risk, but further policy tightening is possible in case of a
demand-led risk to prices materialising, Governor Ales Michl
said on Monday.
The central bank's board voted 5-2 on Feb. 2 to hold its
benchmark two-week repo interest rate at 7.00%, where it has
been since last June following a year-long hiking cycle
totalling 675 basis points.
"We assess data at each board meeting, and if there was a
threat of demand-led inflation, then we would raise interest
rates further. But the data has been pointing to something else
so far," Michl said in a live interview aired by Czech Radio.
Markets have taken bets of further tightening off the table
and actually expect rate cuts to start later in 2023, with a
total of 150 basis points in easing seen in the next 12 months.
Michl said that debate on policy easing was still far off.
"I would like to hold (the main rate at 7.00%) until we are
clearly convinced that inflation is going down and it heads to
2%. Until then, it is not at all on the agenda, we are not even
discussing any interest-rate cut," Michl said.
(Reporting by Robert Muller; Editing by Hugh Lawson)
robert.muller.thomsonreuters.com@reuters.net))
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