Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- The CNB is likely to keep its benchmark rate steady at 7% on August 4, marking the first pause since the beginning of the tightening cycle in June 2021.
- The ‘new’ CNB board seems to be keener on favouring FX interventions to support the koruna instead of rising rates as the economic outlook keeps deteriorating.
- Median estimate is standing at 7.25%, with analysts’ consensus split between no change and a 25bps hike.
Link to full preview:
The Czech National Bank is likely to keep its benchmark rate steady at 7% on August 4, marking the first pause since the beginning of the tightening cycle in June 2021. The ‘new’ CNB board seems to be keener on favouring FX interventions to support the koruna instead of rising rates as the economic outlook keeps deteriorating. Median estimate is standing at 7.25%, with analysts’ consensus split between no change and a 25bps hike.
CPI inflation continued to accelerate in June, coming up at 17.2%, slightly above expectations (17.1%) and up from 16% the previous month. Czech inflation is currently standing at its highest level since December 1993 and continues to be driven by the surge in food and energy prices. Even though the significant divergence from the CNB 3-percent upper tolerance band has been pressuring policymakers to intervene by hiking rates aggressively in the past year, inflation is likely to peak this summer (July/August at 20%) and therefore policymakers have started to increasingly attribute more attention to the growth component.
Source: Bloomberg/MNI
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.