OSTRAVA, Czech Republic, Sept 13 The Czech
central bank expects to remove its cap on the crown currency in
the second half of next year, its governor said on Tuesday,
cautioning markets against betting on an exit before mid-2017.
Jiri Rusnok said the bank, which has held the crown on the
weak side of 27 per euro since 2013 to help keep monetary
conditions easy, sees no reason for abrupt changes in policy.
"At this point our forecast shows that the time may come
sometime in the second half of the next year," Rusnok told Czech
Television in the eastern city of Ostrava.
The bank said after its last board meeting on Aug. 4 it
expected an exit in mid-2017, while a firming of implied crown
exchange rates in the forward market in recent days suggests
market players expect the cap to be abandoned sooner.
That shift occurred after Rusnok said last week that he
could imagine scrapping the cap even if inflation was still a
touch below the bank's target but clearly heading up.
The bank's mantra has been that it will not scrap the floor
until it is certain it can sustainably meet an inflation target
of 2 percent.
(Reporting by Robert Muller; Writing by Jan Lopatka; Editing by
Jason Hovet and John Stonestreet)