(Repeats story published on March 18)
WHAT: Czech central bank meets on interest rates
WHEN: March 24, decision at 1200 GMT, conference 1330 GMT
REUTERS FORECAST: Nineteen of 20 analysts expect the bank to
keep the key two-week repo rate <CZRP=> <CZCBIR=ECI> flat at a
record low 0.75 percent. One analyst forecast a 25 basis point
rise.
All expect the next move to be a quarter-point hike, with 12
forecasting it will come by June and 6 in the second half of the
year. One expects the rise in January 2012.
TABLE: []
FACTORS TO WATCH: A series of downbeat data showed
demand-pull inflation pressures, key for the bank's effort to
maintain price stability, remained subdued.
Consumer inflation, targeted by the bank at 2 percent, fell
short of expectations for a second straight month in February.
Higher global commodity prices have only filtered through to
producer prices so far because low domestic demand is blocking
an overspill to consumer prices.
Fourth-quarter gross domestic product was significantly
below forecasts due to lower domestic demand. Real wages in the
period fell, showing households' financial condition
deteriorated, and no recovery in demand was in sight.
Retail sales rose almost three times more than expected in
January, but analysts said the rise was driven mainly by
corporate car purchases and post-Christmas sales and did not
point to any sudden rise in household demand.
The European Central Bank (ECB) is expected to raise its
main refinancing rate at its next meeting in April, and dealers
have raised bets on a quick hike also by the Czech bank,
expecting rate-setters in Prague may want to prevent a widening
of interest rate differentials.
Central bankers Kamil Janacek and Pavel Rezabek both said
ECB moves did not automatically trigger changes in Czech rates,
and shrugged off concerns a potentially wider negative interest
rate differential would lead to speculative money outflows.
Markets now price in only a 20-25 percent likelihood that
rates will rise next week, according to Komercni Banka interest
rate dealer Dalimil Vyskovsky.
One reason to ease bets on a quick tightening was an
announcement by Janacek, who voted for higher rates already in
February, that he would miss the March session.
Another rate hike defender at the February meeting, Robert
Holman, has been replaced on the board by economist Lubomir
Lizal, whose vote is hard to predict because he has not
commented on policy so far.
The Czech crown <EURCZK=>, a key variable in the bank's
inflation outlook, is a touch weaker than the bank's forecast.
The three-month average exchange rate was 24.6 per euro compared
with 24.5 seen by the bank in the first quarter.
Regional peers, the Polish and Hungarian central banks, have
already reversed their easing cycles in past months. <HUINT=ECI>
<PLINTR=ECI>
Table: []
Czech central bank web site: www.cnb.cz
All Czech economic data: <ECONALLCZ>
Central and Eastern Europe market reports: []
Interview with Kamil Janacek: []
Highlights of cbankers' remarks: []
Analysis on CEE rates: []
(Reporting by Mirka Krufova and Jana Mlcochova; Editing by
John Stonestreet)
