Czech National Bank keeps rates steady, stresses need for tight policy

The Czech National Bank (ČNB) unanimously left its key interest rate unchanged at 3.5 percent, stressing the need to maintain tight monetary policy to keep inflation near its 2 percent target. Governor Aleš Michl said lingering domestic inflationary pressures prevent further cuts for now, citing rising food and service prices, wage growth, and real estate activity among the risks. He added that the board remains open to either raising or lowering rates at its November meeting, depending on new data. Analyst Jan Bureš of Patria Finance noted that the strong koruna is a key factor, limiting scope for further easing.