CNB: Tomas Holub Sought 50bp Cut At September Meeting

The minutes of the CNB's monetary policy meeting held in September revealed that it was Tomas Holub who dissented in favour of a 50bp cut, while all of his colleagues voted for a 25bp move. The document noted that Holub "recommended returning to a medium-term, forward-looking view of inflation" and "assessed the risks of the summer forecast as modestly anti-inflationary overall."

• "Jan Frait also said that his own assessment of the medium-term macroeconomic outlook alone would be consistent with a 0.50 percentage point cut. However, he was taking into account the risk of investors suddenly revising their view of the long-term performance of the Czech economy, which could cause the koruna to come under depreciation pressure."
• However, "a majority of the board members argued in the debate that there were still some inflationary pressures in the economy. They were therefore inclined to be cautious in reducing interest rates, preferring a cut of 0.25 percentage point." Furthermore, "some of the members said that the interest rate reduction process could be paused or terminated at future meetings as rates approached their long-term neutral levels."
• The CNB also published the assessment of risks to its inflation forecast, noting that "the update of the outlook leads to slightly faster inflation this year and in the first half of next year compared with the summer forecast. At the monetary policy horizon, by contrast, the current inflation outlook is slightly lower."