raising rates more would still makes sense By Reuters

PRAGUE (Reuters) – Raising the Czech National Bank’s interest rates further would still make sense as it could serve as a signal that the central bank has not given up on its efforts to tame inflation, board member Tomas Holub said on Sunday.

The central bank has kept its main interest rate at 7.00% since last June when it delivered the last hike in a year-long tightening cycle.

“The situation that rates have been unchanged for a long time makes people think that the central bank is not doing enough, and from my point of view even the signal effect of a further increase in interest rates would be significant,” Holub said in a televised debate.

When asked if a hike would make sense at the next monetary policy meeting on June 21, Holub, who has consistently backed rate hikes, said yes.

“If we have the risk of a wage-inflation spiral here, then sending the signal is still meaningful to me,” Holub said.

The central bank expects inflation, which eased to 12.7% year-on-year in April, to come down nearer its target early in 2024.