PRAGUE (Reuters) – Deputy Governor of the Czech National Bank Eva Zamrazilova is unlikely to vote on a rate cut this year because she expects there is little chance of inflation slowing enough, local media quoted Zamrazilova as saying on Wednesday.
The central bank kept its key rate unchanged at 7.00% in August, after a total of 675 basis points rise since June 2021. It was the first meeting of the revamped board of directors under new Governor Alice Michel, who opposed tightening policy as a board member.
Zamrazilova, one of three new faces among the seven board members, voted flat rates on August 4, and told Reuters last week she would likely maintain her position at the September 29 meeting.
When asked by the daily Denik N how she will vote next week, Zamrazilova said that no inflationary information has emerged since the last policy meeting.
She also reiterated that in order to consider a rate cut, inflation heading towards the central bank’s 2% target must be clear and permanent.
“Until it is confirmed that inflation is reliably heading not just towards single-digit levels, but around 2%, until then we cannot consider easing monetary policy,” she said in an interview published on Thursday.
Asked if such a development could be expected this year, Zamrazilova said that the chances are “minimal”.
Although inflation slowed in August for the first time in more than a year, it was still a long way from the central bank’s target of 17.2%, made worse by rising energy costs in the wake of the Russian invasion of Ukraine.