Czech central banker Frait: main 7% interest rate already restrictive

PRAGUE, Aug 16 (Reuters) - The Czech National Bank's (CNB) current main interest rate of 7% is already restrictive, board member Jan Frait said in an opinion article published on Tuesday.

The central bank held rates unchanged last week, the first in the region to potentially end a tightening cycle, but kept the door open to delivering another increase if upside inflation risks become reality.

"The current level of the monetary policy rate at 7.0% is already creating restrictive monetary conditions," Frait said in a commentary in Hospodarske Noviny daily paper.

Frait also said that big central banks have started to take seriously the risk of threats to price stability and they are ready to tighten their monetary policies further.

"A cooling of global demand will be part of this effort. That needs to be taken into account when thinking about the CNB monetary policy setting," Frait said in the newspaper comment.

However, Frait, who voted for the rate stability last week, had said during the board debate that if the expected cooling of domestic demand did not happen, he was prepared to vote for a rate increase at a future meeting.
Reporting by Robert Muller Editing by Peter Graff

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