Koruna Strengthens In Line With Regional Trend, CNB Gov Says Inflation Will Reach Target In '24

EUR/CZK has faltered today as CE3 currencies (HUF, PLN & CZK in that order) top the EMEA pile. Last trading -0.077 at CZK23.692, the rate is close to its recent multi-year lows, with bears setting their sights on CZK23.664, which limited losses on Feb 10. Besides broader strength in regional currencies, Czech players have digested the latest round of comments from CNB chief, who spoke with Blesk newspaper (as flagged earlier) and Radiozurnal station.

• The readout of Governor Ales Michl's interview with Radiozurnal is out on the CNB's website. The official revealed that the Bank Board will hold its first (non-decision) meeting in the new line-up on Thursday but deflected questions about the expected contribution of the new members to the rate panel's deliberations. He noted that inflation is expected to return to the target next year ("no one knows" whether it will be in 1H2024 or 2H2024) and stressed the role of CZK strength in containing price pressures. The Governor kept rate hikes on the table, noting that the Bank Board will act based on available data at every meeting. He suggested that the central bank would be worried by a rate of wage growth exceeding +10% Y/Y, which is not its base case scenario.