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CZECHIA: CNB Off'ls Flag Room For Further Easing, Czechia Hit By Floods

CZECHIA
EM BulletBulletGlobalEmerging Market NewsCentral and Eastern EuropeRegionCzechia
  • Bloomberg quoted CNB's Tomas Holub as signalling his support for further interest-rate cuts before he leaves the Bank Board at the end of November. Holub said that "it would be premature to end or pause the rate-cutting cycle now," adding that he "personally will have an internal dilemma on whether to cut by 25 or 50bp" at this month's meeting. However, he "would rather expect a consensus to continue with the standard 25bp steps."
  • Separately, CNB's Jan Kubicek rold Reuters that the central bank has room to cut rates by another 25bp at next week's meeting. The official suggested that the slowdown in the pace of easing in August was a welcome decision, adding that he was unable to tell whether cuts should continue at the November and December meetings.
  • Czechia continues to fight the consequences of widespread flooding which hit Central and Eastern Europe. Nonetheless, Prime Minister Petr Fiala confirmed that the country will hold regional and senate elections scheduled for this weekend. Lidovky.cz suggested that the Chamber of Deputies might tweak its agenda for today to discuss the floods.
  • Finance Minister Zbynek Stanjura admitted that the state budget for this year could be amended to address the damage caused by the floods. The deficit target for 2024 is CZK252bn, with just CZK1bn in reserve, while the damage could be in tens of billions. Stanjura said that he doesn't affect the floods to affect the draft 2025 budget.
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  • Bloomberg quoted CNB's Tomas Holub as signalling his support for further interest-rate cuts before he leaves the Bank Board at the end of November. Holub said that "it would be premature to end or pause the rate-cutting cycle now," adding that he "personally will have an internal dilemma on whether to cut by 25 or 50bp" at this month's meeting. However, he "would rather expect a consensus to continue with the standard 25bp steps."
  • Separately, CNB's Jan Kubicek rold Reuters that the central bank has room to cut rates by another 25bp at next week's meeting. The official suggested that the slowdown in the pace of easing in August was a welcome decision, adding that he was unable to tell whether cuts should continue at the November and December meetings.
  • Czechia continues to fight the consequences of widespread flooding which hit Central and Eastern Europe. Nonetheless, Prime Minister Petr Fiala confirmed that the country will hold regional and senate elections scheduled for this weekend. Lidovky.cz suggested that the Chamber of Deputies might tweak its agenda for today to discuss the floods.
  • Finance Minister Zbynek Stanjura admitted that the state budget for this year could be amended to address the damage caused by the floods. The deficit target for 2024 is CZK252bn, with just CZK1bn in reserve, while the damage could be in tens of billions. Stanjura said that he doesn't affect the floods to affect the draft 2025 budget.