Czech interest rates can continue to remain stable at high levels to fight inflation although a further rise cannot be ruled out if new demand pressures appear, central bank (CNB) Governor Ales Michl was quoted as saying on Monday.

"The first positive results of the policy of the new central bank board will appear in the spring. Inflation will start to drop because demand is significantly dampened and the economy is heading to recession," Michl told CTK news agency in an interview.

"People are starting to spend less, which is good. Therefore the CNB can continue in the policy of interest rate stability." (Reporting by Jason Hovet)