(Bloomberg) -- Czech central bank Governor Ales Michl reiterated his pledge to move “very cautiously” with monetary easing to avoid provoking a resurgence in inflation.
Policymakers cannot repeat the mistake when interest rates were held too low for too long before the coronavirus pandemic, which led to an increase in debt, Michl said Thursday at a Forbes conference in Karlovy Vary that was streamed online.
Central bankers in Prague have slashed the benchmark by 275 basis points since December, but slowed the pace of easing to quarter-point reductions at the last two meetings. Michl has previously urged caution with further action and suggested that interest-rate cuts may be halted if inflation risks grow.
“We will be lowering them, but very cautiously,” Michl said. “In any case, on average rates should be higher than what we were used to before.”
The central bank’s next policy meeting is scheduled for Nov. 7.
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