CEEMEA Blog: CEE: CNB rate hike has come into view in the Czech Republic

Research evidence excerpt

CEEMEA Blog: CEE: CNB rate hike has come into view in the Czech Republic

Deutsche Bank

Research

Emerging Europe Emerging Markets Date

Czech Republic 12 June 2026

Hungary CEEMEA Blog

Romania

CEE: CNB rate hike has come into view

in the Czech Republic

Twisha Roy

Czech Republic (CNB): walk the talk Economist

+44-20-754-52413

The CNB is due to meet for its June MPC meeting next week. The decision is likely

to be a close call between keeping policy rate on hold at 3.50% and a 25bps hike to

3.75%. Indeed, the decision may not be unanimous, and a split vote is possible. That

said, in our baseline scenario, we now expect a majority of the Board to support

a rate hike at this meeting already, and we are therefore bringing forward our hike

expectation from August to June. We, therefore, now expect a 25bps rate hike to

3.75% next week.

That said, an on hold decision should not be completely ruled out, and the Board

may still indeed choose to wait for the full forecast update at the August meeting

to deliver the rate increase.

Several arguments would support the CNB keeping policy rate unchanged next

week

n The CNB at its last Board meeting in May had highlighted a wait-and-see

approach. The CNB comments at that time had indicated a reluctance to

react to the first round effect of a supply side shock, and wait to see if

inflationary pressures were broadening beyond energy. The CNB had

pointed out that the Czech Republic economy had entered the shock with

policy rates slightly above neutral, and therefore in restrictive territory. This

was allowing the CNB to be more patient to assess incoming data for

indications of second-round effects. The CNB had noted that if there were

indeed signs of second-round effects materialising – via indications that