WOOD Flash – Czech Republic macro: CNB surprises again, with a massive hike
At its meeting yesterday (4 November), the Bank Board at the CNB surprised to the upside by raising the policy rate (2W repo) by 125bps, to 2.75%, higher than the 75bps increase we and the consensus were expecting. The tone at the meeting suggested that the tightening cycle is not over yet, but that further moves may be at a smaller magnitude. Against the backdrop of the inflationary risks for the coming year, we believe the bank will not hesitate to tighten more than the guidance. Therefore, we have lifted our policy rate forecasts to 3.75% for end-2022E and 3.25% for end-2023E, up from 3.00%.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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