Czech central banker: Rate cut tempo to slow sooner or later

Czech interest rates can still go lower although the tempo of cuts will slow sooner or later, central banker Tomas Holub said on Monday.

Holub, speaking in a live interview with Czech Radio, said it was too early to say if a switch to a slower pace of cuts than the 50-basis-point moves delivered at the past three meetings would come in June.

"We will still get the May inflation figure before then, ... and we will see further developments of the crown exchange rate," Holub said in a live interview on Czech Radio.

"The development of wages in the Czech economy will be important for me personally; if it (wage growth) will be fast, then it is an argument for a slower tempo of rate cuts."

Czech inflation jumped more than expected in April largely due to food prices. At a headline rate of 2.9%, though, it remains within the central bank's 1-percentage-point tolerance band around its 2% target.

The central bank's key rate stands at 5.25% after 175 basis points in cuts since December. Markets have scaled back bets on rate cuts this year amid uncertainty over the timing and pace of rate cuts in the United States or euro zone.

Asked about some expectations the key Czech rate could fall to 4.50% by the end of the year, Holub said it was realistic and added he could imagine it could also be a touch lower than that.