“The Czech National Bank is the only one in the world that fights inflation by raising rates, making your mortgages and loans more expensive and destroying our economy,” Babiš said.
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He then quoted European Lane Bank Chief Economist Philip Lane that tightening monetary policy is now counterproductive. Lane says the tightening would slow the economy and not reduce high inflation.
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He spoke about the policy of the ECB, which is the central bank for countries using the euro, so it sets interest rates for them. It has not yet increased the rate and it remains at a record low of zero percent, where it has been since spring 2016.
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The Czech Central Bank has raised rates several times recently, very significantly. Last from 1.25 percent to 2.75 percent.
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“Instead of helping the CNB, it hurts,” Babis said on Sunday.
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Hi guys, I have good news, I finally got a deadline from the President. When? Watch out! And you will also learn that I am starting to practice. And I’m on a diet. Try to write me something about your experience with diets ????
Posted by Andrej Babiš on Sunday, November 14, 2021
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Higher rates will help the crown
Economists are not so critical of the CNB, although they were surprised by the sharpness with which the bank raised rates. According to them, it signals to the markets that it does not want to allow higher inflation.
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CNB Governor Jiří Rusnok stated that the bank is ready to continue raising rates. He expects a level of around three percent.
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Higher rates lead to a strengthening of the koruna, which will reduce imports and thus commodities whose prices are now rising, such as oil or gas. The growth of the real estate market could also slow down. Mortgages will become more expensive. However, loans and government debt management costs will also become more expensive.
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