Czech cbanker: Rates must reflect firm CZK -paper

...member Pavel Rezabek was quoted as saying in an interview published on Monday. "I would say that this is a period of discussion about raising rates. (But) it is not that easy to decide whether the time is ripe (for a rate hike)," said Rezabek, whom markets view as sitting on the dovish wing of the seven-member CNB board.

"At the same time, we have to realise where we currently have the exchange rate of the crown, which is very strong. It is necessary to weigh the risk of a rate increase possibly causing further strengthening of the Czech currency," added the banker. The remarks were in line with other comments Rezabek has made recently, in which he said the CNB should hold off raising interest rates further after 150 basis points of increases in the past two years [ID:nL14898548].

The CNB has held the benchmark two-week repo rate at a five-year high of 3.25 percent since tightening by 25 basis points in August. But its most recent forecast implies tighter policy to contain resurgent inflation.

The crown has rallied 8 percent to reach lifetime highs against the euro since hitting this year's lows in early July and is up 20 percent over a year ago versus the broadly weak dollar .

Governor Zdenek Tuma said on Saturday the recent pace of crown appreciation was unsustainable and the central bank might have to take a more careful approach in its monetary policy [ID:nL17254836]. (Reporting by Marek Petrus; editing by Alan Crosby and Ruth Pitchford)

Keywords: CZECH CENTRALBANKER/REZABEK

[PRAGUE/Reuters/Finance.cz]