WOOD Flash – Czech Republic macro: MPC firms up against rate cut expectations
At its meeting yesterday (29 March), the Monetary Policy Council at the CNB voted with a 6-to-1 majority to keep the policy rate unchanged, at 7.00%, in line with our expectations. A firm tone was conveyed in the statement, to push back against the market’s expectations of a rate reduction cycle to begin from the summer. At the same time, it was maintained that the next decision will, again, be between pause and a rate hike. While we do not expect further rate increases this year, the MPC appears keen to keep the rate on hold for longer, creating a favourable environment for the Koruna. Looking ahead, we have moved back our expectations for the first rate cut to September, and we see 50bps of upside risk for our year-end policy rate forecast of 5.50%.
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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