By Jana Mlcochova and Jan Lopatka (Reuters, 7.4.2011)
* C.bank vice gov: Demand pressure weak, views unchanged
* Says ECB decision was expected
* Markets expect Czech rate hike by mid-year
Demand pressures in the Czech Republic remain subdued, central bank vice governor Mojmir Hampl said on Thursday.
The market expects the bank to tighten policy by the middle of the year, according to forward rate prices.
But Hampl said his views had not changed significantly since the bank's last policy meeting on March 24, when he voted alongside the majority to hold interest rates flat.
"All factors show that all demand pressures are rather muted and rather weaker even than we had anticipated," Hampl told reporters on the sidelines of a public discussion on the euro.
Hampl has held a relatively dovish view on policy in recent months, while some of his colleagues have spoken in favour of a rate hike.
The bank's board voted 5-1 to keep the main repo rate at a record low of 0.75 percent last month, and the bank's staff forecast sees no hikes until the end of this year.
However, the market expects a tightening by the middle of the year, according to forward rate prices.
Hampl said the European Central Bank's 25 basis point rate hike on Thursday did not alter his views given it had been expected.
He said euro market rates had overshot on the upside after the ECB first signalled rate tightening was coming.
The Czech central bank has often held rates below those of the ECB in the past.
The Czech central bank does not explicitly follow the ECB's policy moves, but the Czech rate direction has usually followed European rates due to the close integration of the Czech economy with Germany.
Board member Eva Zamrazilova has consistently voted in the minority for rate hikes since last year. Board members Pavel Rezabek and Kamil Janacek have adopted a more hawkish tone than Hampl in recent days.