Czech central bank sees rates hike considerations as premature, minutes show

PRAGUE, Oct 3 (Reuters) – Czech central bankers saw considerations on raising rates as premature, minutes from the bank's September 24 monetary policy meeting showed on Friday. The Czech National Bank (CNB) left interest rates unchanged for the third time in a row last week, keeping the main two-week repo rate at 3.50%, as it pauses an easing cycle it started in 2023. The bank has said tight policy was needed as inflation risks from services sector price developments and wage growth continued. On the other hand, the strong crown – which has traded around 22-month highs versus the euro – was an anti-inflationary factor. "There was a consensus that leaving the two-week repo rate unchanged at 3.5%, coupled with the strong crown, provided a sufficient degree of restriction to offset the upside risks to inflation," the bank's meeting minutes said on Friday. It added economic activity still faced uncertainties. "It was therefore necessary to stay flexible; the next interest rate movement could be in either direction. Deliberations on raising interest rates were deemed premature." Markets are pricing in stable rates in the months ahead, while some analysts have said a rate cut could still be possible, maybe in the first half of 2026. ** Click here for full text of the minutes (Reporting by Jason Hovet, Editing by William Maclean)

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