(Repeats story published on Sept 18)
* All 18 analysts see stable rates,most say next move a hike
* Rate meeting on Sept. 24
By Mirka Krufova
PRAGUE, Sept 18 (Reuters) - A monetary policy easing cycle
has likely ended in the Czech Republic meaning the central bank
will keep rates flat next week, a Reuters poll showed on Friday.
Czech policymakers have trimmed borrowing costs by a total
of 250 basis points from a peak of 3.75 percent in August last
year, bolstering a rapidly slowing economy in which inflation
risks remained sidelined.
All eighteen analysts polled by Reuters saw the rate setters
keeping the main two week repo rate <CZCBIR=ECI> used to drain
access liquidity unchanged at 1.25 percent next Thursday.
Although at their record low, Czech borrowing costs are
still above the euro zone's main rate of 1 percent.
Fifteen economists in the poll taken between September 16
and September 18 forecast the next move would be a hike, of
which four expected the hike in the first quarter of 2010.
Two expected one more cut in November.
"Rates are extremely low and their further lowering would
not help the economy," said Pavel Sobisek, a chief economist at
Unicredit, who saw stable rates and a next move a 25 basis point
hike in the second quarter of 2010.
"With the forward looking nature of monetary policy, if we
make some change in the policy now, it's going to show in 12
months and in 12 months I hope we will be in a substantially
different economic situation."
RISKS BALANCED, BUDGET AN ISSUE
Jaromir Sindel, chief economist at Citibank in Prague, said
risks to the bank's macroeconomic forecast were balanced.
Inflation was below the bank's expectations while GDP
contracted deeper. But the picture was brightened by economic
outlook upgrades and the fact that the economy showed a
quarter-on-quarter growth, Sindel said.
The small central European economy heavily dependent on
exports has suffered as the global economic downturn numbed
demand from the West, coercing many local businesses to curb
production or even shut down. []
The crown exchange rate <EURCZK=> has been stronger than the
bank assumptions, limiting price pressures.
But an unclear path of fiscal policy meant there was an
inflationary risk in case the government deficit is not curbed,
Sindel said. []
Central bankers have flagged a set of mixed signals to the
market with Vice-Governor Miroslav Singer talking of another
rate cut if external environment deteriorates while board member
Eva Zamrazilova said a next move would be a hike. []
The bank will meet on rates on Sept. 24. It has
exceptionally shifted the time of a press conference to explain
its decision to 1200 GMT from 1330 GMT.
Neighbouring Poland's central bank head Slawomir Skrzypek
said his country was still in an easing cycle but a recent
Reuters poll indicated there could even be a hike over the next
year. [][]
Hungarian central bank minutes indicated more easing to
come.[]
(Writing by Jana Mlcochova; Editing by Toby Chopra)
