Michl told the Financial Times that the Czech economy had not converged sufficiently with the eurozone, challenging President Petr Pavel’s push to move towards adopting the single currency and said the koruna’s flexible exchange rate remained an important monetary policy tool. The governor also rejected Prime Minister Andrej Babiš’s calls for lower interest rates, arguing that premature easing could threaten price stability. The central bank raised its benchmark two-week repo rate by 25 basis points to 3.75% in June, its first increase in four years, amid strong wage growth and persistent services inflation.
