HIGHLIGHTS-Czech c.bank chief Tuma at monthly news conference

...despite a worsening inflation outlook.

ON NEAR-TERM INTEREST RATE OUTLOOK:

"I see the risks (to the inflation projection) skewed rather in the pro-inflationary direction, or if interest rates were to move in one or in the other direction, then I believe it is more likely that it will be upwards."

ON LAST MONTH'S REMARK THAT AN INTEREST RATE CUT IS ALSO POSSIBLE IN NEXT POLICY STEP:

"If I did not rule out a move in the other direction (at last month's news conference), then it was because the anti-inflationary risks are so significant, and provided that, for example, the appreciation (in the crown currency) continued at a similar pace -- even though I do not believe it is very likely -- one can then imagine also a different reaction in monetary policy (a rate cut).

"However, the baseline scenario of the forecast still foresees a gradual rise in interest rates to confront the pass-through of the inflation shock into inflation expectations."

(Reporting by Marek Petrus and Jan Korselt; editing by Alan Crosby)

Keywords: CZECH RATES/CBANK

[PRAGUE/Reuters/Finance.cz]