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CZECHIA: CNB To Hold Meeting With Analysts After Announcing 25bp Rate Cut

CZECHIA
EM BulletCzech RepublicCEEMEABulletGlobalEmerging Market NewsRegionCzechia
  • The Czech National Bank (CNB) took a unanimous decision to cut interest rates by 25bp yesterday, slowing the pace of monetary easing. The central bank is entering the "fine-tuning" phase of the cycle after its policy rate dropped to 4.50%, getting closer to the neutral level estimated at around 3.0-3.5%. Governor Ales Michl described the decision as "hawkish" and said that the central bank wouldn't mind a mild undershoot of the +2.0% inflation target. Meanwhile, the statement noted that "monetary policy (...) remains tight" as "the Bank Board still sees some inflationary pressures in the economy," even as the risks to the outlook are "broadly balanced." The decision was underpinned by the new economic forecast, which showed a slightly higher interest-rate path, while the projection's horizon was extended to 2026.
  • The opening sections of the CNB's Monetary Policy Report have just been published (click here), with the full document set to come out on August 9, alongside the minutes of the latest monetary policy meeting. Senior CNB staff members, joined by one of the Bank Board members, will hold a meeting with analysts from 10:00BST/11:00CEST. The event is held in English and can be watched online on the central bank's website.
  • EUR/CZK sold off sharply in the wake of the CNB's decision, pulling back from new cyclical highs, before stabilising this morning. CZGB yields have dropped across the curve early doors today.
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  • The Czech National Bank (CNB) took a unanimous decision to cut interest rates by 25bp yesterday, slowing the pace of monetary easing. The central bank is entering the "fine-tuning" phase of the cycle after its policy rate dropped to 4.50%, getting closer to the neutral level estimated at around 3.0-3.5%. Governor Ales Michl described the decision as "hawkish" and said that the central bank wouldn't mind a mild undershoot of the +2.0% inflation target. Meanwhile, the statement noted that "monetary policy (...) remains tight" as "the Bank Board still sees some inflationary pressures in the economy," even as the risks to the outlook are "broadly balanced." The decision was underpinned by the new economic forecast, which showed a slightly higher interest-rate path, while the projection's horizon was extended to 2026.
  • The opening sections of the CNB's Monetary Policy Report have just been published (click here), with the full document set to come out on August 9, alongside the minutes of the latest monetary policy meeting. Senior CNB staff members, joined by one of the Bank Board members, will hold a meeting with analysts from 10:00BST/11:00CEST. The event is held in English and can be watched online on the central bank's website.
  • EUR/CZK sold off sharply in the wake of the CNB's decision, pulling back from new cyclical highs, before stabilising this morning. CZGB yields have dropped across the curve early doors today.