ČNB ready to weaken crown's rate if necessary, says governor

Prague, Oct 11 (CTK) - The Czech National Bank (CNB) is ready to weaken the exchange rate of the Czech crown if necessary but at this moment such a step is not on the agenda, CNB Governor Miroslav Singer told today's issue of daily Hospodarske noviny (HN).

Nither the Czech Republic nor the global economy are in such a bad situation as three years ago, Singer said.

At the end of September, the CNB Bank Board cut interest rates to an all-time low of 0.25 percent.

According to Singer, this step has worked. Now the CNB can cut rates by a quarter point only. Negative rates are not possible. If it was still necessary to boost the economy further even after another cut rate, the CNB would have to take other measures.

"Moving the currency exchange rate seems the simplest solution. It is a logical step in a country that exports products corresponding to 80 percent of its GDP," Singer said.

It is not necessary to make this step at present, according to Singer. "Prices of real estate have fallen. People should not, however, have the impression that the prices will continue falling forever. This may happen and it would be a reason for use to intervene," Singer said.

It is not necessary for the Czech consumer to be even more depressed than in 2007. "People do not have to behave so conservatively. So we are cutting the rates in order to make it unpleasant for them to keep money in banks," Singer said.