The CNB increased its main interest rates by 25bps to 3.75%. The decision is in-line with both our and the market's expectations. The main factors are the expected inflationary growth above 6% and the risk of growing inflationary expectations and wages demands. Another reason is economic performance, which has reached its peak for this business cycle. Countering the other inflationary impacts on the economy has been the strengthening of the CZK exchange rate; however, the variability in this rate in recent weeks and its different influences on the economy (in comparison to the interest rate change) were not bars against a hike. The outlook on future interest rate adjustments has changed in recent weeks. The recession in the US and its impact to the EU and the probable consequences to the Czech Republic suggest a curbing of another interest rate hike in the foreseeable future. It is possible that this interest rate hike will represent the last tightening of monetary policy in the current cycle of increasing rates. Sooner or later, we expect that there will be cuts to these rates on the agenda.