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Last Updated: Oct 28th, 2008 - 17:57:18 |
EUobserver - The Czech Republic will likely adopt the euro later that expected as a result of the ongoing financial turbulence, the chief of the country's central bank has warned.
Czech National Bank governor Zdenek Tuma, speaking during a debate on domestic television station CT24 on Sunday (12 October), said: "I think we will need a time out to wait for financial markets to calm down."
"I believe the current problems on financial markets should pass in a few months," he added, according to Agence France Presse, "and we may reopen the issue next year."
Prague's initial 2010 target date for adoption of the European single currency replacing the Czech koruna has been dropped, with the governing centre-right administration declining to set a new date since it was elected at the start of 2007.
The year 2012 was subsequently floated early last year but again abandoned as unrealistic.
Mr Tuma said nonetheless that the sort of turmoil seen in western Europe was unlikely to be visited upon the central European republic because the success of the domestic economy had meant the country's banks are less exposed to American or other foreign investments.
"Owing to very positive yields offered by their domestic market, Czech banks had very little incentive to chase profits by buying some now problematic investment instruments available abroad," he said.
However, Mr Tuma also said that the country's growth in 2009 will not match the central bank's earlier predictions of 3.6 percent.
"We will present the next forecast (for 2009) at the beginning of November, and I can't say now whether it will be 3.3 or 3.1 percent," he said.
Mr Tuma alsoadded that the central bank was prepared to offer "liquidity in the local banking sector," according to the Dow Jones newswire.
The banker indicated that interest rates are likely to be further adjusted downwards at the next meeting of the central bank on 6 November.
In August, the Czech Republic was the first central European country to cut interest rates, a drop of 25 basis points to 3.5 percent.
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