The Czech National Bank has been in a wait-and-see mode in the second half of this year. Even if the domestic economy is still highly pro-inflationary, this development is mitigated by the anti-inflationary development in the euro area.
Furthermore, the economic risks are still sufficiently high from the central bank’s point of view, which in turn results in higher cautiousness, noted Erste Group Research in a report. In 2020, stability of rates are seen as the most likely outcome.
“The development of CNB rates in 2021 will be affected by the economic situation in the Eurozone. If it improves, the CNB could deliver one additional hike in the second half of 2021”, added Erste Group Research.
