PRAGUE (Reuters) – Czech inflation, while likely to remain high until the end of the year, is near its peak and is unlikely to rise much further before falling in 2023, member Karina Kubelkova said. of the central bank’s board of directors, in an interview to be published on Monday.

Kubelkova, who joined the board in July, said a rise in domestic demand would signal the need for further monetary policy tightening, but that was not materializing.

“The latest data shows that people are stopping spending and consumption is starting to slow down or even fall in some market segments,” she told daily Lidove Noviny in her first public remarks since joining. board of directors.

The bank halted a previous round of rate hikes under new Governor Ales Michl, who also took office in July, and signaled rate stability for an extended period. The bank had raised its main policy rate to 7% in June this year, while inflation hit 18% year-on-year in September.

Wage growth surprised on the upside in the second quarter, Kubelkova said, though she added that she wasn’t as worried as some of her board colleagues about a spiral of wage inflation. wages, as she expected a compromise in wage negotiations between employers and unions.

Kubelkova said the central bank’s interventions in the market for months to support the exchange rate of the krone currency had been an exceptional tool that helped to reduce the bank’s large balance sheet accumulated in previous years. .

She said the data showed the bank did not intervene much in August and she believed the krone’s exchange rate would be roughly where it is now even without intervention.

The krone, backed by billions of euros in intervention over the past few months, outperformed its regional counterparts, the Hungarian forint and the Polish zloty, holding steady at around 24.5 to the euro, up 1.4 % so far this year.

(Reporting by Jan Lopatka; Editing by Jan Harvey)

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