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SocGen Expecting A 100bps Hike, with Risks Being Skewed Towards Bigger Hike

CZECHIA
  • SocGen expects CNB to hike the repo rate by 100bp to 6.75% at its June meeting, with the risks skewed toward an even bigger increase.
  • The outlook for monetary policy is somewhat uncertain given personnel changes in the CNB board in July.
  • After the June hike, SocGen expects interest rates to remain stable until May 2023, when analysts foresee the first cut.
  • Under this scenario, rates should reach a policy-neutral level of 3% in March 2024.
  • However, the interest rate forecast for 2H22 and the rest of the forecast horizon is now more of a technical assumption, as it is not clear what stance the new board will take on monetary policy.

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