June 7, 2018 / 3:19 PM / in a year

UPDATE 1-Czech c.banker Mora: weaker crown could prompt rate hike before end of 2018

(Adds other central banker comments, crown FX rate)

ST PETERSBURG, Russia, June 7 (Reuters) - The weaker Czech crown rate argues in favour of hiking interest rates before the end of 2018 or early 2019, Czech National Bank board member Marek Mora told reporters on the sidelines of a banking conference in Russia.

The central bank’s forecast sees the next hike at the turn of the year at the earliest after the bank raised its main two-week repo rate, currently at 0.75 percent, in three steps since last August.

Mora said his view of the balance of risks would lean “slightly towards an increase of interest rates sooner than we had in our latest forecast”.

The bank’s vice governor, Mojmir Hampl, sounded an even stronger note when he said in an interview published on Thursday that the main rate should be above 1 percent already as the economy is overheating.

The crown, which opened trading on Thursday at 25.670 to the euro, has been hit in recent months with other central European currencies amid emerging market selloffs. It is almost 2 percent weaker than assumptions built into the central bank’s outlook.

At the same time, the economy is forecast to grow nearly 4 percent this year while wage data this week showed the biggest real rise in 15 years.

Mora declined to give a more specific timeframe for the possible rate increase. (Reporting by Andrey Ostroukh Writing by Katya Golubkova and Robert Muller Editing by Gareth Jones)

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