Deputy Governor of the Czech Central Bank: Inflation is losing momentum -website

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PRAGUE, August 16 (Reuters)Czech inflation is losing momentum, although it is still extremely high, Czech National Bank Deputy Governor Eva Zamrazilova told a news site on Tuesday.

The central bank kept rates unchanged last week, the first in the region to potentially end a tightening cycle, but left the door open for another hike should upside inflation risks materialize.

“Inflation is losing momentum. A significant part of domestic demand pressures will cease to be the main driver of inflation,” Zamrazilova told www.seznamzpravy.cz.

Zamrazilova also said voting for rate stability was not easy for her last week.

“It was a very difficult decision. There are a number of inflationary (factors), but also anti-inflammatory factors. I looked at them carefully and went for stability,” she said. .

With inflation still at double-digit levels – 17.5% in July – Zamrazilova predicted a slowdown in spending.

“Spending on essentials, like housing or food, will squeeze non-essential spending like shoes, clothing, furniture, and household utensils. Prices in these segments are stabilizing. August could be more calm,” she said.

However, at the August 4 board meeting, Zamrazilova said she was ready to vote for a rate hike at a future meeting if evidence of a wage and price spiral emerged.

(Reporting by Robert Muller; Editing by Alison Williams; Editing by Clarence Fernandez)

((robert.muller@thomsonreuters.com; Reuters Messaging: robert.muller.thomsonreuters.com@reuters.net))

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