Czech Central Bank Chief Sees Smaller Hike in December, MFD Says

(Bloomberg) -- The Czech central bank is likely to raise borrowing costs much less in December compared with its interest-rate increase from the previous month, Governor Jiri Rusnok said in an interview with MF Dnes newspaper.

The Czech Republic is aggressively tightening monetary policy to tame the fastest inflation in 13 years. With cumulative rate hikes of 2.5 percentage points in the past six months, the central bank is targeting domestic price pressures fueled by a shortage of workers and rapid growth in property prices.

Rusnok expects the policy making board to debate raising rates by a quarter or a half of percentage point on Dec. 22, compared with the previous increase by 125 basis points to 2.75%. November inflation accelerated to 6%, triple the central bank’s target.

“The situation still requires a certain shift in interest rates upward,” Rusnok said in the MF Dnes interview published on Saturday. “We are certainly not yet at the level that we’re expecting.”

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