Czech CB Likely To Trek Policy Rate In the middle of Strong Inflation

By | October 12, 2017

The Czech central bank is likely to raise its rates of interest by 25 basis points at its next conference in early November, as inflation accelerated to a five-year high in September, Liam Carson, an economic expert at Capital Economics, said.

Headline inflation increased to 2.7 percent in September from 2.5 percent in August, information from the Czech Statistical Workplace showed on October 9.

“The pick-up in inflation was generally driven by 3 factors,” the economic expert observed.

Food inflation edged up from 5.6 percent to 5.7 percent.

Second, fuel inflation rose further on the back of last month’s dive in global oil rates.

Third, and most notably, it appears that core inflation continued to rise, the financial expert stated.

The Czech National Bank’s adjusted inflation series is the step of core inflation that the Monetary Policy Committee tracks most carefully.

Although September’s core inflation information has not yet been released, utilizing the current CPI figures, Capital Economics estimates that it climbed to 2.8 percent each year – the greatest rate in the ten-year history of the series and close to the upper-end of the reserve bank’s 1-3 percent target range.

“The Czech MPC will act on August’s 20bp rates of interest hike with a 25bp walking – taking the policy rate from 0.25 percent to 0.50 percent – at its next conference on 2nd November,” Carson predicted.

The material has been provided by InstaForex Company – www.instaforex.com

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