14th September 2017

CNB: Czech rate hike vote may come in September or November

The Czech central bank could raise interest rates again in September or November with economic and wage growth outpacing expectations, board member Vojtech Benda said.

The Czech National Bank (CNB) jumped ahead of others in the European Union in August when it delivered the bloc's first rate hike since 2012, with the sole exception of a move by Denmark in January 2016 to maintain its currency peg against the euro.

The economy expanded a record 2.5 percent on a quarterly basis in the second quarter, and wages posted their fastest gains in a decade.

While recent data have pointed to upside inflation risks, Benda said a pickup in investments should lead to productivity growth that will curb price pressures in the coming quarters and years.

"The current development shows... we have scope for further tightening of monetary policy in the coming quarters and even in the coming months," he told Reuters.

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Members of the American Chamber of Commerce in the Czech Republic