Transcript of the questions and answers from the press conference

The baseline scenario of the forecast… [inaudible] …does this mean that at the moment a further rate hike is more likely, and that further monetary policy easing is no longer probable? Was this also the consensus in the Bank Board? Also, did the Monetary Department prepare any alternative scenarios, and could you outline them for us?

None of the Bank Board members today ruled anything out in the way you suggested. In other words, no one indicated that they were closing off any options. So I can say on behalf of the entire Board that we are keeping all options open, whether downwards or upwards. We will respond appropriately to the risks. That was how I perceived today’s discussion.

Yes, we had two alternative scenarios prepared – for example, slower growth in the German economy and, conversely, stronger inflationary pressures. So we looked at both sides to capture the potential risks facing the economy. Overall, these scenarios suggest broadly stable rates at present, but they will be presented in more detail tomorrow at your meeting with our experts.

I’d like to ask how two new factors are influencing your thinking about the more distant future. One is the manifesto of the new coalition and the incoming government, which doesn’t contain specific figures but, according to independent experts, implies tens of billions in increased fiscal spending annually. The second is the recent postponement of the introduction of the ETS 2 system, i.e. emission allowances for fossil fuels used in households and transport, which was an inflationary risk included in the CNB’s previous forecast.

As for the government’s manifesto, we are still analysing it – or rather, waiting for its final version. The Monetary Department will examine it in detail, so any conclusion from me at this point would be premature. We don’t yet have an analysis that would allow me to say in which direction we will perceive the inflation pressures.

Regarding the postponement of the EU’s emission allowance system, it’s good news for inflation. But the issue is merely being postponed and will also be discussed with you at the expert seminars.

I’d like to ask whether you see fuel prices as a potential inflationary risk, given the current geopolitical situation.

Yes, we do. That’s one of the reasons why the current situation doesn’t allow us to lower interest rates – we perceive these inflationary risks.

To mark the centenary of the central bank, a commemorative banknote featuring micrographics of two faces will be issued next year. One of them will be yours. I’d like to ask – it’s quite unusual, so how did you come up with the idea? Was it perhaps your own suggestion?

The Bank Board consists of seven members, and beneath us are 14 executive directors. One of the departments led by one of them is the Cash and Payments Department, which oversees banknote issuance. It was their proposal to issue a commemorative banknote for the 100th anniversary of the Czech National Bank. We will issue the banknote next year. But it will not feature my portrait in any form. My face simply won’t be on it. I made that decision today, and we confirmed it at the Bank Board meeting. I don’t consider it appropriate.

Issuing such banknotes is fully within the competence of the Cash and Payments Department. Today I intervened in this case unusually. If anyone was offended by the proposal, I apologise. I don’t want my face to spoil our banknotes – they’re great as they are.

Just a follow-up question – could you explain why you suddenly changed your mind?

I usually leave these proposals to the experts. But in this particular case, I intervened. We discussed it in the Bank Board and we decided it would be inappropriate for my face to appear. It’s that simple. Full stop. Case closed.

Next year, you can buy the commemorative banknote. It will mark 100 years since the founding of the National Bank of Czechoslovakia. There was discussion about what would appear in the hologram – we wouldn’t dare alter the banknote itself. The idea is that anyone who wants to can bring in a CZK 5,000 note and receive a special CZK 5,000 note marked with a hologram – technically called an “additional print”. The hologram will feature some symbols – perhaps President Masaryk. We’ll see what the experts come up with, but I definitely won’t be on it. Full stop.

I won’t interfere with the experts. I’ve just said I won’t be on it, and I’ll leave the rest to them. It’s not my place to get involved. I have my own job – targeting inflation. Low inflation is my top priority. Full stop.