Menu

Search

  |   Commentary

Menu

  |   Commentary

Search

Manufacturing industry continues to drive Czech economy, CNB likely to hike rates in H2 2018

The Czech manufacturing industry continues to mainly drive the economic growth. However, most of the other sectors are also indicating a positive trend. Increase in wages and positive expectations of consumers are supporting a rise in consumption on the demand side of the economy. Currently, any fundamental economic changes or reforms are unlikely due to the Autumn Parliamentary elections, noted KBC Market Research in a research report. Furthermore, the progress of Czech’s preparations for joining the euro area is unlikely in this and the next electoral term.

The Czech National Bank abandoned the exchange rate intervention regime earlier this month. As a result, the nation’s monetary conditions tightened. Therefore, the central bank has no reason to tighten the monetary policy soon as it could be apprehensive about the rapid strengthening of the Czech koruna because of the widening of the interest rate differential. According to the KBC Market Research, the CNB’s first rate hike might take place in the second half of the next year.

“We believe the Czech koruna should post gains in the mid to long-term after the end of the interventions seeing it in 1Y horizon about 5% stronger (slightly below 26.00 EUR/CZK)”, added KBC Market Research.

However, in the short-run, the CZK might be volatile in both directions.

  • ET PRO
  • Market Data

Market-moving news and views, 24 hours a day >

August 18 14:30 UTC Released

USECRI Weekly Annualized*

Actual

2.5 %

Forecast

Previous

2.7 %

August 18 14:30 UTC Released

USECRI Weekly Index*

Actual

144.5 %

Forecast

Previous

144.3 %

August 20 21:00 UTC 12521252m

KRU Mich Conditions Prelim

Actual

Forecast

Previous

2.8 %

August 20 21:00 UTC 12521252m

KRU Mich Expectations Prelim

Actual

Forecast

Previous

-0.4 %

August 20 21:00 UTC 12521252m

CAPPI Growth YY*

Actual

Forecast

Previous

2.8 %

August 20 23:00 UTC 13721372m

TRReuters Tankan DI

Actual

Forecast

Previous

26 Bln TRY

August 20 23:00 UTC 13721372m

JPReuters Tankan DI

Actual

Forecast

Previous

26 %

August 21 08:30 UTC 19421942m

ID7-Day Reverse Repo*

Actual

Forecast

Previous

6.278 %

August 21 08:30 UTC 19421942m

IDDeposit Facility Rate*

Actual

Forecast

Previous

18.283 %

August 21 12:30 UTC 21822182m

IDLending Facility Rate*

Actual

Forecast

Previous

0.9 %

Close

Welcome to EconoTimes

Sign up for daily updates for the most important
stories unfolding in the global economy.