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MNI CNB Review - June 2024: Last 50bp Cut In This Cycle?

Executive Summary:

  • The CNB voted 5-2 in favour of a 50bp rate cut, defying consensus.
  • The Board guided that next move will be a 25bp cut or a pause.
  • Governor Michl refused to categorically rule out a larger cut.

Click here to see the full review:

CNB Review - June 2024.pdf

The Czech National Bank (CNB) had telegraphed in advance that this meeting would boil down to a binary decision between a -25bp and -50bp adjustment to the two-week repo rate. However, it still managed to wrongfoot consensus by shaving half a percentage point off the policy rate in a 5-2 vote (two dissenters sought a 25bp cut) instead of reducing the pace of easing. At the same time, the Board made it clear in the statement that it would likely switch to 25bp cuts or pause them altogether in August. On the other hand, Governor Aleš Michl refused to categorically rule out another 50bp cut at the CNB’s next rate meeting.

HomepageCzech National Bank - ReviewEM Central Bank ReportsEM Central Bank ReviewEmerging Market NewsCEMEA Bank - Review

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