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Policy Rate Will Probably Rise Above 6% At Next Meeting on June 22

CZECHIA
  • CNB Governor Rusnok recently mentioned that the central bank will probably hike its benchmark rate again next month on June 22, possibly above 6%, as inflationary pressures continue to remain elevated in the CEE region.
  • With the FRA 3Mx6M currently trading at 6.78%, the market is currently pricing in a terminal rate between 6.75% and 7%.
  • EURCZK has been consolidating lower in the past two weeks, breaking below its 100DMA this morning ad gradually approaching its 24.50 support. Next level to watch below that stands at 24.36.
  • Last week, CNB published the minutes of its extraordinary monetary meeting on May 12; it shows that most policymakers supported the FX intervention as a weakening CZK could increase the inflationary pressure.

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