Transcript of the questions and answers from the press conference

You said inflation pressures in the economy are weakening, which suggests the question why you still expect that you will potentially talk about a possible further hike at the next meeting. Why could you not also start talking about lowering rates, given that the economy is shifting more in the anti-inflationary direction, even by comparison with your forecast? And, as the case may be, what would have to happen in the economy for you to really raise rates eventually?

After long years of financial market experience, I can say that every half-year can be different. Half a year ago, we had somewhat different expectations. The market also had different expectations than it has now.

Demand-pull inflation, household consumption, wages and the budget are important for us. So, if the government does not reduce the public finance deficit, if wage growth is surprisingly high, if household consumption recovers markedly (as unemployment remains low), then I can say for the majority of the Bank Board that we will raise interest rates in that case and we will not let the currently observed decrease in inflation come to a halt.

One more question, which you partly answered, but maybe it could be expanded upon. In the context of market wagers indicating that Czech rates should start falling as early as September, and relatively swiftly, is it possible to be a little more specific about the longer period of interest rate stability? Does it mean until the end of the year? Can you give at least a partial hint?

The Bank Board agreed that the interest rate path will be higher than implied by the forecast, than the path you can see on these slides. There is no point whatsoever in speculating when rates will be lowered and it is not the subject of our meetings at all, nor will we be discussing it for the time being. I think the market expectations will not materialise.