Czech Koruna: CZK softens against Euro as CNB waits – Commerzbank
Commerzbank’s Tatha Ghose reports that the Czech National Bank (CNB) kept its policy rate at 3.75% and returned to a wait-and-see stance after June’s 25bp hike, despite still citing upside inflation risks.
The Czech National Bank (CNB) maintained its policy rate at 3.75% during its latest meeting, echoing expectations and returning to a wait-and-see stance following a 25 basis points (bps) hike in June. The decision came despite the bank still identifying upside inflation risks. Governor Ales Michl expressed a more measured approach, emphasizing core inflation over fuel-price volatility caused by the US-Iran war.
The bank's focus on core inflation rather than short-term fuel price movements reduces the likelihood of rate hikes being triggered by each oil price fluctuation. With forecasts indicating a stable rate environment, Commerzbank predicts the Czech Koruna (CZK) will trade sideways against the Euro, hovering near 24.20 in the coming months.
CNB Governor Ales Michl reiterated that the previous tightening has reached an appropriate level, leaving all options open for future meetings.
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