(Bloomberg) — 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.