9 Jan 2015
CNB might not devalue the Koruna more – KBC
FXStreet (Barcelona) - The KBC Bank Research Team expects CNB to refrain from any more devaluation of the Koruna in the event of another fall in demand and inflation, meanwhile it might wait for further euro data and ECB’s action.
Key Quotes
“Our baseline scenario still envisages that the CNB will not eventually resort to more devaluation and, in the event of another unexpected fall in demand and inflation, as a first step the Bank Board would rather be another extension of its commitment to intervene against the koruna.”
“It is also possible that the CNB Board will be satisfied with weakening the koruna through verbal communication as was recently delivered by CNB’s vice‐governor Tomšík in his commentary for the Czech business daily.”
“In the meantime, the CNB might wait and watch for more macroeconomic data from both the Czech Republic and the euro area and for another ECB’s policy action.”
Key Quotes
“Our baseline scenario still envisages that the CNB will not eventually resort to more devaluation and, in the event of another unexpected fall in demand and inflation, as a first step the Bank Board would rather be another extension of its commitment to intervene against the koruna.”
“It is also possible that the CNB Board will be satisfied with weakening the koruna through verbal communication as was recently delivered by CNB’s vice‐governor Tomšík in his commentary for the Czech business daily.”
“In the meantime, the CNB might wait and watch for more macroeconomic data from both the Czech Republic and the euro area and for another ECB’s policy action.”