CNB will only consider a further rate hike if inflation turns out to be more stubborn
“Since the CNB had expected 18.8% for November anyway it might use the lower 16.2% as an argument to justify its rate decision today. As a result, the CNB is likely to be able to convince the market of its strategy.” “During the course of 2023, it will then emerge whether the CNB was right and whether its strategy of keeping the key rate at 7% will work out as real interest rates will rise simply as a result of falling inflation rates. If that is not the case the CNB will likely have to increase FX interventions against the expected CZK weakness or it might even have to hike the key rate once again.”Information on these pages contains forward-looking statements that involve risks and uncertainties.