(Repeats story published late on Tuesday)
* Next rate decision largely hinges on CPI, GDP details
* Small room for rate cut if no CPI pressures on horizon
By Sandor Peto
BUDAPEST, Dec 8 (Reuters) - The Czech central bank's next
rate decision will largely depend on inflation and GDP data due
Wednesday and there could be room for a rate cut if inflation
pressure is below bank forecasts, a bank board members said.
"I'm really not decided, it's a very difficult situation,"
Czech central bank board member Eva Zamrazilova told Reuters on
Wednesday in an interview on the sidelines of a conference.
"There may be some strong arguments in these data on both
sides."
She said signs of increasing inflationary pressure or higher
than expected consumer demand would support keeping rates at
their current level of 1.25 percent at the next meeting. Lower
than forecast inflation or weaker consumer demand could change
the balance in favour of a rate cut, she added.
"Of course there is some small space (for a rate cut) if
there are no inflationary pressures on the horizon, but if there
are, it's against (a cut). That's the story," she said.
Czech inflation data for November and detailed third-quarter
GDP figures are due to be published at 0800 GMT on
Wednesday<ECONCZ>.
The bank will hold its next rate setting meeting on Dec. 16.
Its board voted on Nov. 5 by a tight 4-3 majority to keep its
key rate on hold at a record low of 1.25 percent. Zamrazilova
voted to keep rates unchanged.
"It's a very subtle situation," she told Reuters.
"Both possibilities will be on the table and I am not
decided yet, it wouldn't be fair to be decided before the
precise analysis of the latest developments are available," she
added.
She said she also wanted to see the report which the bank's
staff would prepare by Friday about the details of the new data,
the prospects of economic activity and inflation in the next 4-6
quarters, and global economic trends, including the outlook for
commodities prices.
"There are many factors at play and the most important thing
in the current situation is that it is so unclear," she said.
Zamrazilova said she needed clear arguments for voting for
a rate cut as the bank eyed inflation trends, while it also
needed to defend the stability of the economy which has started
to show the signs of recovery from a deep recession.
"It's very difficult and one is afraid not to damage the
economy as for the future macroeconomic stability and financial
stability... it's sometimes better to stay on the safe side,"
she said.
She said the short-term movements of the crown<EURCZK=>,
which has firmed in the past few months but gave up some gains
this week, would not influence her decision.
"At present (the crown exchange rate) is in line with the
forecast, at least I hope so," she said. "But primarily we
really forecast on the inflation, short term fluctuations of the
currency are just short term and we shouldn't take them into
account."
(Reporting by Sandor Peto; Editing by Andrew Hay)
