The Czech National Bank has been read as signalling caution on further tightening, with markets seeing less appetite to hike unless inflation deteriorates. Its forecast has moved closer to prevailing pricing, with the PRIBOR rate expected to peak at around 4.55%. At the same time, inflation is projected to worsen through the rest of the year, approaching 3% and rising towards 4% in 27Q1, keeping attention on the risk of renewed hawkish repricing.
Czech Koruna Outlook and Monetary Policy
In FX, EUR/CZK has come under upward pressure, and shifts in rate differentials imply a move towards 24.450. Even so, seasonal koruna strength in November and December is expected to provide some support, leaving EUR/CZK seen in a 24.350–24.400 range.
Polish Zloty, CEE Currencies, and the Regional Environment
In Poland, the National Bank of Poland’s tilt to a more hawkish stance may offer near-term backing to the zloty, but broader risk-off moves remain the dominant driver for CEE currencies.
