Producer prices reflect two opposite forces. Falling demand and industrial orders pushes prices into the deflation area. But, CZK depreciation in December and January lifted import prices higher as can be clearly visible in case of petroleum products prices rising by 9.2% m/m in February.
This FX effect together with significant currency volatility speaks against aggressive monetary easing. Thus, CNB can refrain from cutting rates at the end of March.
Actual (February): 0.3% m/m; -0.6% y/y
Consensus: 0.1% m/m; -0.8% y/y
Previous (January): 1.1% m/m; -0.8 y/y