Czech cbank's Singer: Rate hike is on cards-agency

...CNB Vice-Governor Miroslav Singer told Bloomberg in an interview.

In remarks published late on Monday, Singer said it was unclear whether a 10.5 percent rise in the crown since this year's lows in early July would alone tame resurgent consumer price growth, without the central bank tightening its policy.

CNB rate-setters next move on Dec. 19, and Singer did not rule out a rate increase, Bloomberg reported.

Singer was quoted as saying that "the level of restriction that we considered enough" to tame prices may "prove to be insufficient" and that the resulting trajectory of interest rates at this point was not clear to him.

"So the December debate will be substantive," said Singer, a known advocate of a flexible policy stance who has tended towards hawkish views in past months.

"What is evident is that the level of restriction will have to be higher," he said, adding that it was not clear how the CNB will achieve that with interest rates and the crown's exchange rate.

Soaring food prices propelled annual inflation to 5 percent in November from 4 percent a month earlier, well above both the 4.5 percent market forecast and the 3.6-4.2 percent projection by the CNB staff.

CNB policymakers raised their benchmark rate by 25 basis points to a 5-1/2-year high of 3.50 percent in November on concerns that buoyant demand is making it easier for retailers and producers to pass food and energy price rises to consumers.

Most analysts have said the CNB could wait until early next year before tightening policy again. The strong crown is helping to tame inflation pressures by offsetting a rise in commodity and other import prices.

The crown traded at 26.030 per euro by 0900 GMT, within sight of an all-time peak of 25.933 reached on Monday after the high inflation reading. (Reporting by Marek Petrus; editing by David Stamp)

Keywords: CZECH CENTRALBANK/SINGER

[PRAGUE/Reuters/Finance.cz]