Policymakers of the Czech National Bank assessed that the risks to the inflation forecast were balanced, the minutes of the meeting revealed Friday.
A higher outlook for oil prices and short-term outlook for food prices were upside risks to inflation. Meanwhile, additional downside risks were associated with the currently stronger exchange rate and government consolidation measures, the minutes showed.
The Board noted that net exports were the only source of GDP growth. Domestic demand were subdued as households' saving rate continued to rise. At the same time, firms are accumulating cash avoiding investment.
Although risks to the forecast are balanced, members see significant uncertainties associated with the external situation.
The central bank retained its two-week repo rate at 0.75 percent by a majority vote. Six members voted in favor of the decision, while Eva Zamrazilová sought a quarter point hike. The meeting was held on March 29.
by RTT Staff Writer
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