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Koruna Remains On Back Foot, CNB Lowers CCyB Rate

CZK

EUR/CZK operates close to its best levels of the session, last +0.110 at 24.528. The pair's latest leg higher coincided with the announcement of the CNB's decision to lower its countercyclical capital buffer (CCyB) rate by 25bp, albeit the potential for an adjustment had been signalled earlier. The koruna is the second-worst performer in EMEA FX space today, lagging both its CE3 peers PLN and HUF.

  • Note that the Bank Board reviews the CCyB rate on a quarterly basis and today's adjustment was the second back-to-back 25bp cut. Back in June, CNB's Karina Kubelkova said that "the Bank Board is ready to lower the buffer rate gradually further if we see a continuation of the trend of cyclical risks naturally fading out of the banking sector’s balance sheet."

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