Czech National Bank may resume its tightening cycle - Rabobank

Analysts at Rabobank suggest that the Czech National Bank may resume its tightening cycle at today’s meeting after the koruna lost its bullish momentum and depreciated so far in Q2.

Key Quotes

“Robust economic activity and prevailing demand-led inflationary pressure also support the notion for a hike.”

“The main argument in favour of waiting until perhaps next month is the risk of the US imposing tariffs on European cars which would have negative implications for the Czech economy.”

“It is a close call, but in our view the CNB may raise its policy rate by 50bps to 1.00% when the decision is announced at 12:00bst.”