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CZECHIA: CNB Bank Board Holds To Decide On Countercyclical Buffer Rate

CZECHIA
EM BulletBulletEmerging Market NewsCentral and Eastern EuropeCzechia
  • The Czech National Bank (CNB) is set to discuss financial stability and announce its quarterly decision on macroprudential policy, including the level of the countercyclical buffer (CCyB) rate. The Bank Board unanimously voted to leave the rate unchanged at 1.25% during the previous review in September, noting that cyclical risks "remain stable even as the Czech economy gradually shifts to the start of the expansionary phase of the financial cycle." The decision will be announced at 14:45GMT/15:45CET.
  • According to the slides published on the CNB's website, outgoing Bank Board member Tomas Holub said that his personal assessment of macroeconomic forecast risks is slightly anti-inflationary, while the potentially stagflationary impact of the US presidential election is a new source of uncertainty. The official was the only member voting in favour of a 50bp cut earlier this month, when the CNB cut rates by 25bp.
  • The IMF said that the Czech economy is "slowly regaining ground" while the central bank has room to cut the repo rate to around 3% next year. This would bring the rate towards the official estimate of its neutral level. For clarity, the current CNB forecast assumes a neutral rate of 3%, while some Bank Board members believe that it is closer to 3.5%.
  • Defence Minister Jana Cernochova denied planning to dismiss General Miroslav Hofirek, the commander of the special forces, despite her ongoing conflict with Hofirek and Chief of the General Staff Karl Rehka.
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  • The Czech National Bank (CNB) is set to discuss financial stability and announce its quarterly decision on macroprudential policy, including the level of the countercyclical buffer (CCyB) rate. The Bank Board unanimously voted to leave the rate unchanged at 1.25% during the previous review in September, noting that cyclical risks "remain stable even as the Czech economy gradually shifts to the start of the expansionary phase of the financial cycle." The decision will be announced at 14:45GMT/15:45CET.
  • According to the slides published on the CNB's website, outgoing Bank Board member Tomas Holub said that his personal assessment of macroeconomic forecast risks is slightly anti-inflationary, while the potentially stagflationary impact of the US presidential election is a new source of uncertainty. The official was the only member voting in favour of a 50bp cut earlier this month, when the CNB cut rates by 25bp.
  • The IMF said that the Czech economy is "slowly regaining ground" while the central bank has room to cut the repo rate to around 3% next year. This would bring the rate towards the official estimate of its neutral level. For clarity, the current CNB forecast assumes a neutral rate of 3%, while some Bank Board members believe that it is closer to 3.5%.
  • Defence Minister Jana Cernochova denied planning to dismiss General Miroslav Hofirek, the commander of the special forces, despite her ongoing conflict with Hofirek and Chief of the General Staff Karl Rehka.