CNB Hawkish Stance Supports Koruna Against Dollar Pressure, Says ING

The Czech National Bank (CNB) raised its key rate by 25 basis points to 3.75%, and the June meeting minutes reinforce its hawkish stance, according to ING FX strategist Frantisek Taborsky. Markets are now pricing in another rate increase as core inflation risks persist.

Taborsky highlights that the CNB is the most hawkish central bank in Central and Eastern Europe, which underpins the koruna against headwinds from the US dollar. The hawkish policy differential provides a buffer for the CZK currency.