Czech Republic's unexpectedly low inflation likely to lead to no policy reaction from CNB

Czech National Bank's repurchase rate is currently at 0.05%, while the market participants expect it to be kept steady in its upcoming meeting at 0.05%.

CNB is not set to take any action regarding its monetary policy in its December meeting. Czech's inflation surprised to the downside, whose shock was limited to fuel and food prices, while there was solid core inflation.

"We thus believe the bank's board will keep its interest rate on hold at technical zero and leave the FX floor at EUR/CZK 27. We do not expect the regulator's guidance to change either", says Societe Generale in a research note.