Central Banker Mora Says He Prefers Rates Over FX Interventions As MonPol Tool

The Koruna looks through comments from Czech Central Bank Dep Gov Mora who says inflation may accelerate in January but is probably approaching its peak. He dismisses the surprisingly large October slowdown to one-off effects, noting that headline inflation would otherwise print above +18.0% Y/Y.

• Mora expressed his view that interest rates should rise further in order to return inflation to the target, but concedes that his assessment is not shared by colleagues from the central bank. He notes that the next two meetings are unlikely to see rate hikes.
• On the FX front, Mora says he prefers interest rates rather than FX interventions as the primary tool of monetary policy. "I would be in favour of using the exchange rate in a very limited way."
• EUR/CZK last trades flat at CZK24.36. USD/CZK sits +21 pips at CZK23.79. Familiar technical levels remain in play.