PRAGUE, June 27 (Reuters) - The Czech central bank (CNB) left interest rates near zero on Thursday and said the likelihood of currency interventions to weaken the crown has risen.
Following are Governor Miroslav Singer's remarks at a news conference following the decision:
ON FX INTERVENTIONS
'We agreed that the probability of launching interventions is growing.'
'If we come to intervening, we will not be buying foreign currency for a few crowns, we will be buying foreign currency in a bigger amount.
'We agreed that there is not going to be any definite target (on the exchange rate) or long-term target. We want to use the exchange rate as a... substitute for the interest rate if we need to.'
ON WHY BANK HAS NOT INTERVENED YET
'Because we have not found an agreement to this step yet. We do not blindly mimic the forecast. We try to smooth out some steps... But as I said the likelihood that we will intervene has evidently risen under current conditions.'
'There are signs of a potential recovery but the recovery looks very non-inflationary. We see a steep drop in prices on the market that we consider an oligopoly, nothing indicates that the recovery should generate some inflationary pressures.
'As an institution targeting inflation and not GDP we are not interested the fact of a recovery. We are interested in what it will do with prices.'
'Risks are going even further in the direction of the need of loosening monetary conditions in comparison with the forecast. The risk in this direction is... lower domestic inflation. We have not identified any risks going in the opposite direction.'
(Reporting by Jana Mlcochova and Jason Hovet; Editing by Jan Lopatka) Keywords: CZECH RATES/HIGHLIGHTS
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