Three rate decisions on the agenda next week but no action expected
We have three rate decisions due next week - in Hungary, the Czech Republic and Turkey. We expect all three central banks to stay on hold, which is in line with consensus.
We expect the Czech central bank (CNB) to keep the key policy rate at the technical zero of 0.05%. We expect the statement to be fairly balanced and neutral. The central bank could note some downside risks to the Czech economy from the Ukraine crisis. In our view, the CNB will continue to see the inflation risk to be on the downside. The market reaction is likely to be very limited as long as the bank does not turn more dovish, which we do not expect at this time.
We expect the Hungarian central bank (MNB) to stay on hold next week and maintain the key policy rate at 2.10% . Although the risk event on the back of the Ukraine crisis has faded recently and the HUF is currently experiencing some relief, we believe the MNB is probably done or very close to the end of monetary policy easing.
In our view, the Turkish central bank will stay on hold, keeping the key policy rate at 8.25%.
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