Money in Czech Republic
Czech Republic - Money
CNB delivers first rate hike of 2019
On 2 May, the Bank Board of the Czech National Bank (CNB) unanimously decided to lift the two-week repo rate by 25 basis points to 2.00%, marking the first rate hike of the year. At the same time, the CNB increased both the Lombard rate and discount rate by 25 basis points to 3.00% and 1.00%, respectively.
The Board’s decision was underpinned by the change in its macroeconomic outlook, with its inflation projections raised compared to the February 2019 forecasts. The shift was in large part due to the recent acceleration in inflation, which reached an over six-year high of 3.0% in March, hitting the upper bound of the CNB’s 1.0%–3.0% tolerance band. The Bank expects that inflationary pressures will remain elevated in the coming months, owing largely to higher administered prices and food prices; however, they are seen gradually easing thereafter on slower wage growth and economic activity, with inflation coming back down to the 2.0% target in early-2020.
In terms of forward guidance, the Bank’s projections alluded to broad stability of rates in the coming year and hence a pause in the tightening cycle which started in mid-2017. That said, analysts contend that further tightening may be warranted if inflation remains stubbornly high or if a notable improvement in external conditions were to materialize, particularly in the Eurozone economy.
The next monetary policy meeting is scheduled for 26 June.
Against this backdrop, Met the why particular Consensus Forecast panelists see the two-week repo rate at 2.15% at the end of 2019, before increasing to 2.30% at the end of 2020.
Czech Republic - Money Data
|Money (annual variation in %)||5.0||6.6||8.4||6.6||8.6|
5 years of economic forecasts for more than 30 economic indicators.
Czech Republic Money Chart
Source: Czech National Bank and Met the why particular calculations.
Czech Republic Facts
|Bond Yield||1.85||-1.85 %||May 13|
|Exchange Rate||22.92||-0.66 %||May 13|
|Stock Market||1,044||-0.11 %||May 13|
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May 15, 2019
Annual GDP growth slowed a notch in the first quarter of the year in seasonally- and price-adjusted terms (Q1 2019: +2.5%; Q4 2018: 2.5%), broadly in line with market expectations.
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Consumer prices rose 0.1% from the previous month in April, following March’s 0.2% month-on-month increase.
May 9, 2019
Industrial production rose a marginal 0.1% year-on-year in March, moderating from February’s 1.5% increase.
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The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, fell from 47.3 in March to 46.6 in April, marking the fifth successive monthly contraction of the all-important sector and the lowest reading since December 2012.
May 2, 2019
On 2 May, the Bank Board of the Czech National Bank (CNB) unanimously decided to lift the two-week repo rate by 25 basis points to 2.00%, marking the first rate hike of the year.