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CNB Officials Say That Monetary Conditions Are Historically Tight

CZECHIA
  • CNB Governor Ales Michl and his advisor Adam Tomas wrote in a blog post that Czechia's monetary conditions are historically tight, dampening money supply and household consumption. They noted that inflation will decline to the target if the economy develops in line with CNB forecasts, but the Bank Board stands ready to raise interest rates if the risk of an increase in demand pressures materialises. The piece came out after Michl delivered a keynote speech at a university in Prague, calling money-market bets that the CNB could cut interest rates in Q3 "premature." His comments did not have much impact on the local FRA curve, given that the Governor has been deploying similar rhetoric for some time now.
  • Various actors are set to comment on the government's austerity package today. Head of the National Fiscal Council Mojmir Hampl will discuss the matter in an online interview, while trade unions will present their estimates of the impact of fiscal consolidation measures on households.

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