CNB may keep bank rate unchanged

Czech National Bank to take decision on rate change on 6th August meeting. No change in monetary policy is expected in the meeting.

Rates should stay at technical zero and the bank will maintain the FX floor at 27.00 CZK/EUR, argues Societe Generale. Both real economy and inflation figures surprised on the upside and therefore the discussion moved from whether to increase the floor or postpone the exit towards the possibility of an earlier exit and negative exchange rates.
 
Societe Generale says, "We maintain our main scenario of an exit in Q3 16, but we see a non-negligible probability (20%) of an earlier Swiss style exit. The CNB's approach to any exit would be dependent on the market and data situation."