ING expects the Czech National Bank to hold rates at 3.75% but adopt softer guidance, pressuring the koruna against the euro.
The Czech National Bank is likely to keep interest rates unchanged at 3.75% at its upcoming meeting, according to ING strategists. July inflation data, at 1.7% year-on-year, is expected to have minimal impact on the decision, with focus shifting to forward guidance.
Market expectations had centered on steady rates, but recent communications suggest a more dovish tone from the CNB. This shift could reduce support for the koruna, particularly against the euro, as investors adjust to a less hawkish policy outlook.
The koruna has faced pressure in recent weeks, and softer CNB guidance may extend this trend. Analysts note that the central bank’s stance could diverge from regional peers, influencing cross-border capital flows.