(Bloomberg) -- Most Czech central bank board members saw some persistent inflationary pressures in the economy, which warranted a cautious pace of interest-rate cuts, according to minutes from the last policy meeting.
Governor Ales Michl opened the deliberations by saying that “the fight against inflation was not over, so it was necessary to further curb the excessive growth in the quantity of money in circulation and to continue to lower interest rates only moderately,” the central bank said in the document published on Friday.
Tomas Holub was the sole board member voting for a 50 basis-point rate cut. He pointed to the outlook for below-target monetary-policy inflation, the economy running below its potential and fiscal policy hindering the recovery this year, primarily via household consumption.
Deputy Governor Jan Frait said his own assessment of the medium-term outlook would be also consistent with a half-point cut, but he saw a risk of investors “suddenly revising their view of the long-term performance of the Czech economy, which could cause the koruna to come under depreciation pressure.”
Some of the members said monetary easing could be paused or terminated at future meetings as rates approached their long-term neutral levels, according to the minutes.
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