We revise lower our rate forecast for the Czech Republic to one 25bps increase by end-2011 (from two such increases). We attended the central bank’s analyst meeting last week: it is surprising, given the wholly dovish inflation developments of late, that the CNB projects noticeable inflation acceleration over the coming months, and that Governor Singer has remarked that monetary tightening could arrive slightly sooner than previously thought. Our own base case is being revised lower; we would not be surprised if tightening plans were altogether abandoned this year.
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