As expected, the Czech National Bank left interest rates unchanged at yesterday’s meeting. According to Governor Michl, the current degree of monetary policy tightening is sufficient, giving the central bank scope to assess incoming data and the persistence of inflationary risks. The CNB’s new staff forecast implies that the key repo rate will remain at 3.75% for the rest of this year and throughout 2027. This is also our baseline scenario. While the resilience of the domestic economy argues against early rate cuts, we do not expect further rate increases, as inflationary pressures should gradually ease.