FACTBOX-Czech c.bank to cut CPI goal, raise transparency

...from 2008, harmonising its policy framework with peers in industrialised countries.

The following are changes the CNB announced on Thursday.

For a news report, double click on [ID:nL08474011].

* Inflation target, expressed as an annual rate of inflation based on the Consumer Price Index (CPI), to fall to 2 percent from January 2010 from 3 percent now.

* The policy objective is to tolerate deviations of up to 1 percentage point either side of the midpoint, uchanged from now.

* The forward interest rate path in the CNB's quarterly inflation projections to be unveiled from 2008 as a fan chart to highlight uncertainty surrounding the outlook.

* The chart to show what moves in the 3-month Prague Interbank Offered Rate are implied by the CNB's inflation projections to keep price growth on target. The 3-month PRIBOR already serves as the proxy for the CNB's key policy rate, the two-week repo, in its forecasting model.

* The published rate path is not meant to signal any committment from the CNB. Policymakers may take different views on the rate outlook than implied by the inflation projections drawn up by the CNB's expert staff.

* From 2008 the CNB to also start publishing a roll call of policymakers' votes on rates, instead of the overall count of votes cast for each proposal as is current practice. It has yet to be worked out if voting records will be released on the day of a rate decision or as part of abridged minutes of policy meetings published on eight days after the meeting takes place.

* Number of monetary policy meetings to be reduced to 8 per year from 12 at present.

* Policymakers to still discuss an updated inflation and economic growth projections along with a policy decision once every quater. One meeting to be held in each interim period between the quaterly sessions focused on the projections which are then explained in depth in the quarterly Inflation Reports.

* Calendar of policy meetings for 2008 to be published this autumn.

((Compiled by Marek Petrus; Editing by Ian Jones; Reuters Messaging: rm://marek.petrus.reuters.com@reuters.net; e-mail: prague.newsroom@reuters.com or marek.petrus@reuters.com; Tel: +420 224 190 477))

Keywords: CZECH CENTRALBANK/