Czech industrial producer prices fell 3.5 percent in January 2015 compared to a year ago, while the month-on-month index fell by one percent. The Czech Statistics Office reports that prices of energy, oil products and chemical products led the way, as did agriculture products. Analysts contacted by Czech Radio expect the trend to continue in the coming months. Viktor Zeisel of Komerční banka believes the Central Bank could do even more than it has so far to devalue of the Czech koruna. “In an extreme case, the ceiling for the exchange rate could go as high as 28 koruna or higher [per euro],” he warns.
There’s no agreement on whether reducing interest rates further would lead to the hoped-for increase in lending. Markéta Šichtařová of Next Finance says “banks don’t have enough good projects to lend to. Instead they behave like speculators. They’re buying stocks, for example, and thanks to that they’re blowing up the price bubble,” she says.
