PRAGUE (Reuters – JiriRusnok, Czech central bank Governor, defended Sunday’s bank’s sudden 75 basis point rate rise after it was criticised by Alena Schillerova, Finance Minister ahead of a parliamentary elections.

Schillerova stated that the hike changed economic policy to one suitable for developing countries. [L8N2QW5J1]

Rusnok declared, “Those words were absolutely incompetent,” during a TV debate. “Terms are being used in a way that does not make sense.”

He explained that economic policies encompassed both fiscal and structural policies, as well the domain of the central bank’s monetary policy. It was his belief that other central banks will follow his lead in tightening monetary policies.

He stated that the independence of the Czech central bank was not under pressure from the government ahead of the Oct. 8-9 elections.

We don’t feel political pressure. These things occur during more volatile phases of development. Rusnok stated that he does not believe there is any danger in our current situation.

This move by the bank, which was more than the expected 50-basis point tightening in financial markets, raised the main repo rates to 1.5%.

Rusnok stated that more hikes were planned for Thursday and that he would repeat the same on Sunday.