PRAGUE, Feb 4 (Reuters) - The Czech central bank kept
interest rates on hold on Thursday, as expected, and signalled
it would not change policy until a tightening seen in the second
half of the year.
The following are comments by Governor Zdenek Tuma at a
press conference following the bank's meeting on Thursday.
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For TABLE with c.bank forecasts, click on []
ON RATES
"It is possible to expect that interest rates will remain at
its present level.
"I will not predict our future decision, although if there
are no major dramatic shocks, and no new risks appear, then it's
not very likely that we would move with interest rates in the
nearest months or move (with rates) in a significant way."
"The next move in rates, our repo rate, is more likely in an
upward direction, as we perceive the development of Czech
economy."
"As shown by the interest rate trajectory, it is possible to
assume that this is a period when there could be some turnaround
and interest rates could start growing."
"As we perceive the development of the Czech economy in the
coming two years, interest rates will go rather in the upward
direction, probably (not until) the second half of the year."
ON INFLATION
"Household consumption will remain muted, that is why we do
not see inflation as a major risk this year."
"Pressures on the labour market will continue, unemployment
keeps rising and we do not expect that unemployment should start
falling this year, rather it will be the other way round."
"So no pressure from the side of households can be
expected."
ON GROWTH
"The recovery should be driven by export, and the
development abroad..."
"We continue to assume an asymmetric W (meaning that) there
will be some growth in gross domestic product. Subsequently
growth will slow down and a more robust growth should come in
2011."
ON CROWN
"Our model assumes a very gradual appreciation of the
exchange rate in the next two years."
ON GREEK CONTAGION
"We do not expect a direct impact. A direct exposure of the
financial sector to Greece and Spain and their financial systems
is minimal."
"As for (rise in) risk premium... I personally do not see a
big risk there. We past a year or two when investors learned
cautiously to differentiate developments in individual
countries."
"A year or two ago the central and eastern European region
was perceived as one unit but since then it has become obvious
that it is not homogenous."
"It has also shown that the euro zone not is very homogenous
either."
"From the point of view of better distinguishing
developments in individual countries, I would not expect any
major impact on the situation here."
(Reporting by Jana Mlcochova and Robert Mueller)
