Petr Král – Interest rates should rise further owing to inflation

Executive Director of the CNB’s Monetary Department Petr Král in an interview for Hospodářské noviny: “To tame the current inflation period, which has a substantial domestic component, short-term interest rates need to rise quickly. They would have to remain for some time even above the neutral level, which is around 3% for the repo rate in nominal terms. We want to make sure that there is not only a turnaround in inflation, but that it declines quickly enough close to the 2% target within a year and a half and stays there. Therefore, we need to bring rates to above the policy-neutral level for a while.”