Czech rate cuts nearing point of slowing, Holub tells daily
PRAGUE, July 24 (Reuters) -The Czech National Bank is nearing the point at which it could slow the pace of interest rate cuts after 50-basis-point reductions at previous meetings, with a 25-bp move possibly up for discussion, policymaker Tomas Holub was cited as saying.
"For me, we are approaching the point where it is reasonable to move from 50-bp steps to standard steps of 25 bps," Holub said in an interview with daily E15 published on Wednesday.
The CNB has cut interest rates by 225 bps since December, including four straight 50-bp reductions that have brought the main two-week repo rate CZCBIR=ECI to 4.75%.
The bank signalled a likely slowdown in its easing after its last meeting in June, although below-forecast inflation data since then has raised speculation the bank could maintain its current tempo when it meets Aug. 1.
Holub said a next move down by 25 bps was a "good starting point for discussion". He added it was premature to stop cutting rates.
He said he could imagine supporting a cut at each of the bank's final four policy meetings this year, but that would also depend on the situation.
"The outlook of having rates at the end of the year just below 4%, which would mean cutting by 25 bps at each meeting, is realistic for me," he told E15. "But it is a momentary outlook."
Czech inflation has fallen back to the bank's 2% target and is forecast to stay below 3% this year, the upper end of the tolerance band.
But the bank has observed elevated service sector price growth that has been a concern, along with risks of stronger wage growth after inflation crushed real wages in previous years.
Reporting by Jason Hovet, Editing by William Maclean
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