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MS Expecting a 50bps Hike on May 5

CZECHIA
  • MS expects the MPC to look to smooth out the policy rates profile by delivering less in the near term but by guiding to a delayed easing cycle relative to the new forecast.
  • With that, MS maintain its expectation for rates to peak at 5.75% and expects the CNB to deliver a 50bp hike at its upcoming May 5 core meeting but to leave the door open for more tightening in this quarter.
  • Risks to MS call remain skewed to the upside on the back of still elevated inflation expectations and potential FX weakness, depending on geopolitical developments.

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