OECD Chief Gurría: Monetary Policy Consistent with Situation
The Organisation for Economic Cooperation and Development (OECD) understands the reasons which prompted the Czech National Bank to decide to use the exchange rate as an additional instrument for easing the monetary conditions, said Secretary-General of the OECD Angel Gurría at today’s briefing at the CNB Exhibition. The OECD recommends that the CNB maintain easy monetary policy until the deflation risks subside completely.
“We would like to see that the interventions are no longer necessary. At the same time, while we see that they are necessary, they are appropriate,” said Mr Gurría at a joint briefing with CNB Governor Miroslav Singer.
“You need to avoid the movements in the markets becoming too extreme. And if they do, then [as the central bank] you have to moderate them. You don’t want deflation, just like you don’t want extreme inflation,” added Mr Gurría.
Miroslav Singer said the CNB would not exit its current exchange rate commitment – aimed at preventing excessive appreciation of the koruna beyond CZK 27 to the euro – before the start of 2015. This is in line with the CNB Bank Board statement issued after the February monetary policy meeting.
“From our perspective, the assumption that we will stay in the regime [of using the exchange rate as an instrument for easing monetary policy] for the whole of this year still applies. At this juncture, the inflation figures are not certainly suggesting any surprise towards higher inflation – probably the opposite,” said Mr Singer.
Marek Petruš, CNB spokesman