Log in
Forgot password ?
Become a member for free
Sign up
Sign up
New member
Sign up for FREE
New customer
Discover our services
Dynamic quotes 

MarketScreener Homepage  >  News  >  Companies

News : Latest News
Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesBusiness LeadersFinance Pro.CalendarSectors

T. Nidetzký – Inflace nad cílem je dočasná

share with twitter share with LinkedIn share with facebook
09/16/2020 | 05:55am EDT

Interview of the Deputy Governor Tomáš Nidetzký
By Krystof Chamonikolas (Bloomberg 16. 9. 2020)

As central banks around the world expand their help to economies hit by the coronavirus pandemic, Czech policy makers can sit tight and let inflation do its work. After cutting interest rates the most in the European Union this year, the Czech central bank is probably done with easing, Deputy Governor Tomas Nidetzky said in an interview on Monday. It should keep the benchmark at 0.25% for at least a year before considering raising it, he said, as resilient price growth will support a recovery from a virus-triggered recession. While a resurgence in coronavirus cases is darkening the outlook for the export-reliant economy, the government is keeping unemployment low and propping up household spending, for now. That's one of the reasons for inflation running above the tolerance range set by the central bank, which has signaled the next move will likely be a hike.

'The current inflationary episode is temporary and will benefit the economy by encouraging consumption, investment and gross domestic product growth when it's most needed,' Nidetzky said. 'It also puts us in a comfortable position in that, unlike the euro zone, we're not seeing any deflationary pressures and don't need to implement any unconventional monetary-policy tools.'

The 50-year-old economist and former financial-industry executive praised the combined response of fiscal and monetary policy. Like many countries across Europe, Prime Minister Andrej Babis's government has subsidized salaries and commercial rents, paid extra bonuses to health-care workers and provided guarantees for cheap business loans.

'The roll-out was fast, bold and coordinated,' said Nidetzky. 'The government is now facing a big challenge as its initial quick blanket stabilization measures need to be followed by more targeted stimulus.'

Read more:

Despite record daily increases in new infections this month, Babis has pledged to avoid a second full lockdown. Still, the rising uncertainty has prompted money-market investors to scale back bets on the central bank starting to raise rates in the second half of next year.

The quickening spread of Covid-19 is making the central bank's forecast, which also assumes policy tightening after mid-2021, seem 'rather optimistic,' according to Nidetzky. He expects inflation to slow after the current rescue programs are phased out.

'Many of the furloughed workers are de facto already unemployed -- their jobs will disappear when the wage subsidies and other government measures expire,' Nidetzky said. 'I believe one way the central bank can at least mitigate the high degree of uncertainty is keeping its interest rates stable.'


Ceska Narodni Banka published this content on 16 September 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 September 2020 09:54:09 UTC

share with twitter share with LinkedIn share with facebook
Latest news "Companies"
05:38pBANCO COMERCIAL PORTUGUÊS S A : Português, S.A., informs about 1H 2020 Report and Accounts
05:10pTHRACE PLASTICS AND COMMERCIAL S A : Announcement of H1 2020 Financial Results
05:09pNZ's a2 Milk forecasts higher revenue for 2021 citing demand in China
05:07pWRTC INVESTIGATION ALERT : Bernstein Liebhard is Investigating Wrap Technologies Limited For Violations of the Securities Laws
05:04pJUVENTUS FOOTBALL CLUB : Ronaldo's header salvages draw for Juventus at Roma
04:55pSOITEC : launches an offering of bonds convertible into and/or exchangeable for new and/or existing ordinary shares (Oceanes) due October 2025 for a nominal amount of up to approximately €325 million
04:54pGLNG LOSSES ALERT : Bernstein Liebhard is Investigating Golar LNG Limited For Violations of the Securities Laws
04:40pA2 Milk Sales Dented by Victoria Pandemic Restrictions --Update
04:25pBILLBOARD : Interim Individual Financial Statements as of 30.06.2020
Latest news "Companies"