PRAGUE (Reuters) – Czech inflation, whereas prone to keep excessive till year-end, is close to its peak and shouldn’t rise a lot additional earlier than dropping in 2023, central Financial Institution board member Karina Kubelkova mentioned in a newspaper interview to be printed on Monday.

Kubelkova, who joined the board in July, mentioned whereas an increase in home demand would sign the necessity for an extra tightening in Financial coverage, this was not materialising.

“Newest information present that persons are ceasing to spend and consumption is starting to sluggish, and is even declining in some market segments,” she instructed every day Lidove Noviny in her first public remarks since becoming a member of the board.

The financial institution halted a earlier cycle of fee hikes below new Governor Ales Michl, who additionally took his put up in July, and signalled fee stability for an prolonged interval. The financial institution had raised its most important fee to 7% by June this yr, whereas inflation reached 18% year-on-year in September.

Wage development stunned on the upside within the second quarter, Kubelkova mentioned, although she added she was not as nervous as a few of her board colleagues a couple of wage-inflation spiral, as she anticipated a compromise in wage talks between employers and unions.

Kubelkova mentioned the central financial institution’s months-long operating market interventions to prop up the crown forex’s alternate fee had been an distinctive instrument that was serving to to cut back the financial institution’s giant stability sheet constructed up in earlier years.

She mentioned information confirmed the financial institution didn’t intervene a lot in August, and that she believed the crown’s alternate fee could be roughly the place it was now even with out interventions.

The crown, propped up by billions of euros in interventions previously months, has outperformed regional friends the Hungarian forint and the Polish zloty, staying steady at round 24.5 to the euro, up 1.4% to date this yr.