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Kubicek Stays Vague Over Rate Cut Timing

CZECHIA
  • In a TV interview late yesterday, CNB’s Kubicek stated that an easing path ahead will be cautious in nature, with the bank wanting to be certain that they can contain inflation expectations in order to avoid a scenario in which CPI is stuck between 4 and 5%.
  • On fiscal policy, Kubicek stated that fiscal developments as well as wage growth are no longer a significant risk to the outlook, with the CNB still expecting to reach their 2% inflation target in around six months. On rate cuts more specifically, Kubicek stated that he cannot say whether rates will be cut before year-end or, alternatively, at the beginning of 2024.
  • Mortgage rates continue to pull lower as the CNB appear to have confirmed the peak bank rate, with the average mortgage rate now at 5.8%, the lowest level in a year.

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