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Interest Rates Are Already At Levels That Dampens Domestic Demand Pressures (Michl)

  • CNB Governor Michl commented in some tweet posts this morning that interest rates in Czech Republic are already at level that dampens domestic demand pressures.
  • Michl added that the reduction of inflation in the LT does not fully depend on monetary policy, but also on the credibility of whether the government is ready to stabilize debt.
  • CNB member Jan Frait recently mentioned that taming inflation faster would cause excessive costs for the economy, including a considerable increase in unemployment.
  • We previously saw that leading indicators such as business surveys or financial conditions are already pricing in a significant deterioration in the economic activity in the coming 6 months (see chart).

Source: Bloomberg/MNI

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