Central bankers playing different tunes

Czech National Bank officials have come up with very different – even contradictory – statements on lending rates this week. Vice-governor Miroslav Singer can imagine falling rates, while vice-governor Mojmír Hampl would like to see them rise.

In an article for the Ekonom weekly, Singer used his traditionally heavy language, which could serve as a puzzle for seminars at the Faculty of Mathematics and Physics. Singer wrote: „If it is decided that the current unprecedented firming of the crown could result in the undershooting of the target on the horizon of the forecast, it doesn't mean the central bank cannot step in and prevent a massive downfall in demand causing a price drop below the inflation target by easing its monetary policy.“ The ČNB has every right to take steps to meet inflation targets, he adds. „Regardless of the fact that it could come as an unpleasant surprise for some players on the Czech crown market,“ says Singer. Puzzle solvers have translated this hieroglyph to the effect that vice-governor Singer is not ruling out a rate cut.

In an interview for Hospodářské noviny, vice-governor Mojmír Hampl said a strong crown would not be enough to stifle inflation, adding that it was necessary to raise interest rates.

The central bankers have presented two opposite opinions on quite an important issue. First, we can probably rule out…