A second member of the Czech National Bank’s board has come out in favor of a rise in interest rates, saying that rising pressure labor prices and an energized rate of inflation could force the issue far sooner expected. Having raised two-week repo rates in February to 0.75 percent (from 0.50), the central bank predicted that no more tightening would be needed before the end of the year. But the CNB’s Tomas Nidetzky has now told Reuters the time schedule could be moved forward significantly, possibly to next week.
“I do not think there is a difference if we (raise rates) now in June, or in August, or that it would matter significantly for the economy,” Nidetzky told Reuters. “In other cases I always said: ‘Let’s wait for figures from the economy and the new outlook.’ Today we already have the figures.” Last week, the CNB reined in mortgage loans by making the conditions borrowers need to meet far stricter. Nidetzky’s colleague at the bank Mojmir Hampl already voted for a rate increase at a May meeting of the central bank. The next vote will take place on June 28.
