PRAGUE, March 13 (Reuters) - Czech central banker Oldrich Dedek is inclined to vote for an interest rate cut at the Czech National Bank (CNB) board's next meeting on March 26 as the country is battling the coronavirus outbreak, he said on Friday.
CNB surprised markets in February with a 25-basis-point increase of its main two-week repo rate to 2.25%, as inflation rose further above the central bank's tolerance band of 1% to 3%.
As Czechs fight the epidemic, the central bank should offer a hand, Dedek said.
"In difficult times, central banks should grasp the oars," he said in response to emailed questions, replacing a planned interview after the central bank banned entry to everyone except its employees to limit the coronavirus risk.
"For the nearest monetary policy meeting, my hand itches for a rate cut. But how big it should be and whether it could have already been delivered by the weaker crown, I will have to clarify by studying the monetary section's feedback," he said.
Since the CNB's Feb. 6 meeting, the crown has dropped by 3.8%, easing monetary conditions in the export-oriented Czech economy, which is expected to slow this year from the 2.4% growth recorded in 2019.
A weaker crown helps exports, but the economy faces weak foreign demand and problems with domestic logistics now, Dedek said.
The central bank has had help from a drop in oil prices, which may help bring inflation back to its target, Dedek said.
Consumer prices rose by 3.7% year-on-year in February, a 0.1 percentage point acceleration from the previous month.
"In short term, I raise bets that oil price will help return inflation within the tolerance band," Dedek said.
The bank's concern for price growth has been dampened by the global coronavirus epidemic, which had killed almost 5,000 people worldwide as of Friday. It is spreading throughout Europe, with Italy suffering the heaviest blow.
The Czech government stepped up its measures against the disease earlier on Friday, imposing a ban on foreigners entering the country and Czechs leaving, while trade flows should remain uninterrupted. The country had 120 cases and no deaths from the infection as of Friday. (Reporting by Robert Muller, editing by Larry King)