Czech cbanker sees higher CPI fcast, rates-Bloomberg

...will need to react with more interest rate hikes, CNB Vice Governor Ludek Niedemayer told Bloomberg in an interview published on Friday.

"Most information coming from the economy in the past quarter supported the need to move the inflation forecast higher, which would naturally imply an equivalent move in interest rates," he said.

"Available data shows that the unusual circumstances that allowed us to keep rates very low for a very long time are over and the monetary policy must react to this."

Niedermayer is seen as the most hawkish member of the seven-strong Czech central bank board.

Analysts believe he was the only board member who voted in favour of a 25-basis-point rate hike last month.

A Reuters poll of analysts showed the market expects the bank to hike the key repo rate by a quarter-point to 3 percent on July 26 when it meets for a quarterly reassessment of the inflation outlook.

The bank's April quarterly forecast saw headline inflation at 3.2-4.2 percent at the end of this year and at 2.7-4.1 percent in December 2008.