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CNB Prepares For 50bps Hike Despite FinMin 'Warning'

CZECHIA
  • This morning, Finance Minister Alena Schillerova and representatives of opposition parties to take part in election debate about plans to support economic recovery (BBG). On Monday, Finance Minister Alena Schillerova recently urged CNB not to raise interest rates as it would increase the borrowing costs and weaken the investment needed to help the economy recover from the pandemic.
  • We have seen in recent weeks that policymakers' tone has turned more hawkish following the positive surprise in inflation in August, with CNB now expected to raise the policy rate by 50bps on September 30.
  • Yesterday another member Holub said that he will 'quite likely' vote for a 50bps rate hike in September.
  • Four of the central bank's seven members (including Governor Rusnok) are likely to vote for a 50bps hike on September 30.

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