Czech c.bank starts meeting, no rate change seen

...will stay on hold for the third consecutive month.

The bank's spokeswoman said the presentation of a monthly report on monetary and economic developments began at 9 a.m. (0800 GMT), and will be followed by debate on interest rate settings.

All 22 economists in a Reuters poll predicted central bankers would hold the key two-week repo rate at 2.50 percent.

The CNB has no set time for a policy announcement but it usually publishes its interest rate decisions between 12 p.m. and 1 p.m. (1100-1200 GMT). The bank's spokeswoman said a news conference was scheduled for 3:30 p.m. (1430 GMT).

Czech interest rates are among the lowest in the European Union and a full percentage point below the euro zone equivalent, reflecting the strength of the country's currency, which has tightened credit conditions in the small open economy.

CNB Governor Zdenek Tuma told Reuters last week interest rates may rise somewhat less or later than previously thought and that the crown's rise over the past weeks was on the verge of being "totally crazy" [ID:nL11602090].

His remarks re-inforced growing market expectations the bank might wait with any further rate hikes until at least February or March, as its inflation outlook looks set to undergo a downward revision in its next update in January.

[PRAGUE/Reuters/Finance.cz]