Czech cbank cuts CPI target to 2 pct from 2010

...the country's policy framework on a par with that of many industrialised countries.

The CNB, a pioneer of inflation targeting in post-Communist central Europe, has a track record of undershooting its current goal for the annual consumer price index (CPI), which is 3 percent with a tolerance of 1 percentage point either side.

Governor Zdenek Tuma told a news conference that from 2010, the CNB would aim at the 2 percent target midpoint over the four to six quarters required for changes in monetary policy to be felt in the economy. It would keep a tolerance range of up to 1 percentage point on either side the midpoint.

The change was not entirely unexpected as some policymakers have floated the idea of a target reduction. But markets had deemed any decision unlikely before the government and the central bank agree a new road map for adoption of the euro.