Transcript of the questions and answers from the press conference

The Bank Board – as you told us a while ago – sees the risks to the new forecast as broadly balanced. From the documents we currently have, it's not entirely clear where the new forecast sees market interest rates and, in turn, official rates at the end of the year. So, I'd like to ask where the forecast sees them and whether the Bank Board's reasoning is the same, or whether, as sometimes in the past, the Bank Board is a bit more cautious in the outlook.

You will receive this information more precisely in the background documents, or in the presentation we will give tomorrow, where you'll see the path exactly. At present, I wouldn't like to comment much on where we see it. I don't want to send out a precise guideline on where we want to have rates or don't want to have rates. We'll really keep everything open. So my answer is that we don't want to indicate where rates will go in the future.

I wanted to ask if you discussed the latest data at today's meeting and, if so, how you assessed them or what your comments are on them. Some of these data came in after the forecast was prepared - I mean retail sales, GDP and inflation, all of which were lower than expected by the central bank. This means they were seen as anti-inflationary factors and as a possible argument for a further cut of 50 basis points. How did you deal with these recent signals from the economy? Why didn't they perhaps prompt you to take a larger step today?

We carefully analysed and debated all these data, but I could equally well give you other data, for example from the services sector, where price growth remains high and the persistence is still visible. It's the case all over the world that services prices have not yet been tamed significantly. So, we discussed the two arguments, and they are among the reasons for our caution. The outlook is uncertain. We'll see. We have another meeting in two months' time. We'll assess the data again. And that's also why we can't say what the next step will be.

We now have inflation back at 2%, and the Czech National Bank clearly prefers a cautious, conservative, more hawkish approach. I'd just like to ask if you also discussed the risk - and what you said about it - that, in short, monetary conditions could remain too restrictive and could excessively choke the economy, which has been stagnating for two years now, and, as a result, maybe lead to a greater undershooting of the inflation target. Did you deal with this scenario at all? And if so, what do you think about it?

Yes, I would assess this as a hawkish rate cut, if it can be put that way. In the ten years before Covid, the Czech economy had very low interest rates, 1% on average. We had zero interest rates for a long time. Debt was supported and inflation was supported. During most of the previous governor's term of office, inflation was above the target. Therefore, in my opinion, and I can say this for most of the Bank Board members, we wouldn't mind what you asked about, i.e. a slight undershooting of the inflation target. On the contrary, it would be moderately welcome.