Is the end of interventions coming soon?
4.02.2016Company: Amcham
Commentary of Jan Bureš, chief economist of Poštovní spořitelna. CNB will present prognosis, which will count with the lower inflation both in this year and in the monetary policy horizon (12-18 months) at its February session. A significant change in rhetoric and commitment of CNB to intervene untill the late 2017 will probably not occur.
CNB will leave interventions when it will be obvious that inflation lifted off from near zero and heads visibly above the target. At the same time CNB must believe that inflation above the target will last longer time, therefore it is necessary that the inflation is supported by growing domestic wage pressures. This should happen during the second half of 2016. Anyway, the ongoing printing of money in the eurozone, combined with a certain amount of caution will likely cause CNB to postpone exit from the interventions to the beginning of 2017.
More information in the attached press release (in Czech language).
