PRAGUE, May 29 (Reuters) - Czech central banker Tomas Holub
said on Sunday he was likely to support a further interest rate
hike in June of about 75 basis points.
The increase would bring the key two-week repo rate
to 6.5% after the bank delivered 550 basis points
worth of rates hikes over the past year as it fights inflation,
which rose to 14.2% in April.
The next monetary policy meeting is due on June 22.
"I assume that in June, I will support another raise of
interest rates, roughly the size expected by the financial
market (about 75 basis points)," Holub said in a live debate on
Holub has said previously that he would probably vote for
another hike in June but he did not specify the size.
"That is a realistic market prediction, which takes into
account that the market knows our macroeconomic forecasts, where
our outlook would see the level of interest rates which would
return inflation to low digits at sufficient speed," he said.
The bank's latest quarterly forecast, issued in May, foresaw
rates peaking around 8% this quarter. But at its May 5 meeting
the board took a step closer to an alternative scenario
modelling a slower inflation drop and a lower rate path.
Since the May meeting, where the bank signaled that more
hikes could come, Governor Jiri Rusnok and Vice-Governor Tomas
Nidetzky have said that a rate hike was likely in June, while
board member Vojtech Benda mentioned stable rates as a
Only two members on the seven-seat board, Oldrich Dedek and
Ales Michl, have consistently voted for stable rates over the
past year. Michl is due to take over as governor of the board in
President Milos Zeman has yet to decide on three nominations
to the board, which could swing the majority view on the board
(Reporting by Robert Muller, Editing by Michael Kahn and Hugh