PRAGUE, April 24 (Reuters) - The Czech National Bank
(CNB) could be headed for its first interest rate cut in
September if inflation falls as expected and looks set to
continue easing, Vice-Governor Eva Zamrazilova said in an
interview.
The Czech bank, like others in central Europe, had moved
faster than global peers in sharply raising interest rates from
2021, and is now among frontrunners to begin cutting rates
before others.
The bank's main interest rate has remained at
7.00% since the middle of last year, following 675 basis points
of hikes in a year-long tightening cycle.
Inflation eased to a rate of 15.0% in March, and the central
bank forecasts a slowdown into single digits in the second half
of this year.
Zamrazilova and others on the seven-seat board have said
easing could be considered only when inflation is in the
single-digits and clearly headed towards a target band of 1%-3%.
"September will be richer with data, so if it goes in the
right direction, and I will be certain enough that it will
continue in the following months, then (a rate cut) is
possible," Zamrazilova said in an interview on Monday.
Zamrazilova said enough data should be available before the
Sept. 27 meeting. The bank meets next on May 3 and markets see
rates on hold until cuts within six months.
Zamrazilova said the crown, which touched a 15-year high
this month, was helping to tighten policy, and she added that
even though global peers like the European Central Bank were
tightening policy, and narrowing the interest rate differential,
this did not warrant a Czech hike.
(Reporting by Robert Muller, editing by Jason Hovet)
robert.muller.thomsonreuters.com@reuters.net))
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