MNI CNB Review - Dec 2024: Pause For Thought

Executive Summary:

• The Bank Board left the two-week repo rate unchanged at 4.00%.
• Two policymakers dissented and voted for another 25bp cut.
• The Governor described the decision as a pause rather than end of easing cycle.

Click here to see the full review: MNI CNB Review - December 2024.pdf

The Czech National Bank (CNB) paused its rate-cutting cycle after bringing the two-week repo rate from its peak level of 7.00% to 4.00% through a series of cuts since December 2023. The on-hold decision was expected by most analysts and baked into money markets, but two policymakers dissented in favour of another 25bp rate cut. The statement referenced the assessment of the updated inflation outlook and new macroeconomic data, which showed that inflation will remain above the +2% Y/Y point-target until end-2026, pockets of inflationary pressure persist in certain segments of the economy.