On Wednesday, the trading pattern known from previous sessions slightly changed and instead of the divergence, the koruna slightly strengthened (although it had hit yet another -month lows in early trading) whereas both the forint and the zloty posted small losses.
Regarding Hungary/IMF deal, Mihaly Varga, the minister who is in charge of negotiations, said today that might be struck between mid-August and the end of October depending on progress in negotiations. Regarding Hungary/IMF deal, according to IMF managing director Christine Lagarde, the IMF is ready to start official negotiations with Hungary once the central bank law is modified as the amendment proposals address the key concerns of the fund. Mihály Varga, Hungary’s chief negotiator for the IMF talks stated that talks can start in mid-July and an agreement can be reached any time from mid-August until the end of October. The final deal – a new loan might reach about EUR 15 bn.
Today’s eye-catcher is, however, the Czech National Bank’s (CNB) meeting. The CNB is likely to cut its repo rate by 25 basis points to a new all-time low of 0.50%.
Two CNB Board members already voted for a repo rate cut the last time, while more calls for easing the monetary policy have come from the CNB since. The central bank’s position is facilitated by the fact that inflation is lower than envisaged by the current forecast, while the economic downturn is faster. June’s anticipated rate cut might be followed by a long period of record-low rates, lasting until at least the middle of next year.