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Ad-hoc reports: The CNB tightens monetary policy further via a significant 125bp hike

11/5/2021 9:51 AM

The central bank further accelerated the tightening of monetary policy yesterday by raising its key repo rate 125bp to 2.75%. This exceeded all estimates. The reason for the higher rate remains inflation, which according to the CNB’s new forecast is likely to approach 7% yoy at the beginning of next year. Governor Rusnok said that the 125bp hike has done a significant part of the necessary monetary policy tightening, but that it isn’t over yet. At end-2021, we expect a repo rate of 3.25% while a peak of 3.75% should be reached by the end of 1Q22.

Autor: Martin Gürtler
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