Central European Daily

While the Czech koruna strengthened slightly yesterday to 24.45 EUR/CZK, its regional peers, the zloty and the forint, weakened. Recent forint´s weakness has been borne by expectations of further rate cuts (the next NBH meeting is scheduled for January 21). Although the NBH had proclaimed less aggressive monetary policy, yesterday´s data showing a meagre growth of industrial prices in November (+0.9 %) signal room for further monetary easing in spite of the US tapering. Unlike the NBH, the Polish central bank, whose meeting starts today, is not supposed to change its rates and no surprise statement has been expected to come from the press conference following the meeting, either. Hence the single issue that has remained veiled in uncertainty in Poland to date is the beginning of monetary tightening that, in our view, may come at the turn of the third and the fourth quarter this year.