Czech challenges in monetary policy

A new paper published by the International Monetary Fund concludes that Czech National Bank will have to raise rates if the proposed reduction of the inflation target in 2010 is not fully incorporated into public-sector behaviour and inflation is above the target at that time.

Against a backdrop of rising inflation pressures, the authors investigate how the authorities' fiscal reform package and the planned reduction in the inflation target in 2010 would weigh on the conduct of monetary policy.

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