Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
Executive Summary:
- CNB expected to raise rates by 50bps to 5.00%, a new cycle high
- Board remain under pressure as CPI rates hit highest level since 1998
- Bank to retain option to intervene in currency markets
CPI inflation accelerated to 11.1% in February (vs. 10.3% exp.), its highest level since June 1998, up from 9.9% the previous month, mainly driven by the surge in food and energy prices. Figure 1 (left frame) shows that inflation has been diverging significantly from the CNB 3-percent upper tolerance band, which has been pressuring policymakers to remain ‘hawkish’.
In its winter forecasts published in February 2022, the CNB staff revised its inflation forecasts higher for 2022, now expecting CPI to average 8.5% before starting to gradually decline towards its range in 2023. In addition, the CNB stands ready to act and intervene in the FX market if needed in order to limit the CZK depreciation as the koruna has been very sensitive to the headlines related to the Russia/Ukraine conflict.
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.