PRAGUE: A no-deal would have both pro-inflationary and anti-inflationary effects and it would be wise to wait how these factors play out before reacting with policy moves, Czech central bank board member said on Tuesday.
Holub said at a debate on Brexit that the exchange rate would likely be weakened in a no-deal Brexit scenario, raising inflationary pressure. But at the same time the economy could have an anti-inflationary effect of cooling exports, he added.
“I personally think that this is a type of uncertainty where it is better to wait and then consider the proper reaction of ,” Holub said.
Fellow central bank board member Vojtech Benda wrote in a newspaper article on Monday that no-deal Brexit‘s impact on the exchange rate would prompt policymakers to consider tighter policy.