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PRAGUE, March 2 (Reuters) - The Czech National Bank's
monetary policy has been having a restrictive effect on the
market although further tightening cannot be ruled out, the
bank's Vice-Governor Jan Frait said on Thursday.
The central bank has kept its main interest rate at a high 7.00% since last June. Some board members
and analysts have argued that the rate should have gone higher
to help keep inflation expectations in check.
"Lately, the (central bank's) monetary policy has been very
restrictive," Frait said in an article co-authored with board
adviser Jakub Mateju, posted on the central bank's website.
"Both main components of monetary conditions affect the
economy and inflation in a way which subdues demand, and thus
the inflationary pressures too. It cannot be ruled out that the
restrictiveness of monetary policy could show as insufficient in
the coming months," they said.
Frait and Mateju said further tightening could come via
interest rates or crown exchange rate conditions, without giving
details.
The bank has had a pledge since last May to intervene "to
prevent excessive fluctuations of the crown", which it has used
to prevent significant weakening, although it was able to stay
out of markets in recent times as the crown scales more than
14-year highs.
In the article, Frait identified accelerating wage growth,
inflation decreasing too slowly in core items, or rapidly
reviving loan dynamics as possible signals for more tightening.
The central banker has voted with the majority for stable
rates since he joined the board last July.
(Reporting by Jason Hovet and Robert Muller; Editing by Hugh
Lawson)
robert.muller.thomsonreuters.com@reuters.net))
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