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Rates Will Need To Rise Further (Holub)

CZECHIA
  • Yesterday, CNB member Holub mentioned in an online debate that rates will need to rise further to combat inflation.
  • With the FRA 9Mx12M currenting trading at 87bps above the Pribor 3M (see chart), market is pricing in a terminal rate between 5.75% and 6%.
  • The Finance Ministry is offering for sale as much as CZK12b of new bonds maturing in 2024 and 2026, as well as EU50m-100m in new 2-year euro-denominated notes in a domestic auction (BBG).
  • This morning, economic data showed that PPI inflation accelerated to 24.7% YoY in March (vs. 23.3% exp.), up from 21.3% the previous month.

Source: Bloomberg

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