CZECHIA: CNB Will Debate 25 or 50bp Cut at June Meeting

CNB Governor Ales Michl comments on monetary policy and inflation in a speech titled "Taming Inflation from 18 to 2% and Paving the Way for ESG Financing". The most pertinent comments are as follows:

• "The debate at the next meeting at the end of June will probably be about whether to cut by 50 or by 25 bps. Both options are open, and in both cases, we will still be in the restrictive territory. Then we will be very cautious about further rate cuts. We will assess new data at each meeting and decide accordingly. The rate cutting process can be paused or stopped at any time if inflation, especially core inflation, is not in line with our forecast."
• "We will stay hawkish and do everything we can to achieve long-term price stability and not trigger inflation. Our hypothetical/model-based R* is 3–3.5 per cent in nominal terms. The closer we get to our neutral interest rate, the more likely it is that we will slow down or even interrupt the normalisation of our policy."

Full comments here.