PRAGUE, May 7 (Reuters) - The Czech central bank often discusses intervening to weaken the crown, its governor said, in comments that hit the currency.
In a presentation at an economic conference on Tuesday, Singer also said Czech lenders were facing increased pressure to cut margins and their profits may fall in coming years.
The central bank cut the key two-week repo rate to 0.05 percent in November and said that, if it needed to ease policy further, it would use interventions to weaken the crown.
Inflation is falling in the Czech Republic, which has been locked in a recession since mid-2011.
'We are discussing interventions quite often now,' Singer said. The crown eased to a one-week low of 25.80 to the euro after the comment, from 25.748 earlier, according to Reuters data.
The currency has been on a downward path since the rate cut, falling to a 17-month low in April and removing the need for the central bank to step into the market.
A weaker currency makes imports more expensive, raising inflation which has dropped below the bank's 2 percent target. It would also raise exporters' revenues.
Some central bankers have however warned that a weaker crown would further crimp household demand, suppressed by three years of austerity measures.
BANKS UNDER PRESSURE
Czechs' thrift has also hit lending, causing loan growth to households to slow, Singer said, and consumer loans have been shrinking since 2011.
That has hit banks whose margins are also under pressure from the record low interest rates.
Lender Komercni Banka said on Tuesday net profit fell by almost 10 percent in the first quarter, citing falling interest margins and fees.
'We think that (banks) will not be able to create such (big) profits as they did in the past, which does not mean that they will not be able to create very decent profits in the European context,' Singer said.
(Reporting by Jana Mlcochova; Editing by John Stonestreet) Keywords: CZECH CBANK/
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