Czech policy makers may be able to delay raising interest rates as the euro area’s debt crisis lowers the outlook for borrowing costs in the region, said Vladimir Tomsik, a central banker in Prague.
The Czech central bank needs to relax monetary policy further to lift inflation toward its target, Vice Governor Vladimir Tomsik said.
The Czech koruna depreciated for a second day as Deputy Governor Vladimir Tomsik signaled the central bank won’t tolerate currency gains during a recession.
The Czech central bank kept interest rates unchanged today, after reducing borrowing costs for the first time in two years in June, and signaled it may continue with monetary-policy easing as economic outlook worsens.
The Czech economy is facing the risk of a recession that without currency interventions could eclipse the record-long slump it exited this year, central bank Deputy Governor Vladimir Tomsik said.
The Czech central bank has more room to cut interest rates before it applies less conventional policy tools to ease monetary conditions, Vice Governor Vladimir Tomsik said.
After shunning euro membership for a decade, the Czech Republic is now reaping the benefits of the common currency without its pitfalls.
Czech economist Kamil Janacek , who has argued against the country’s quick adoption of the euro, was appointed to the central bank board, reinforcing the euroskeptic outlook among policy makers.
"There was one quarter of revival, and the flash estimate for the third quarter shows we may return to recession."
- Vladimir Tomsik on Nov 20, 2013