REUTERS POLL: MEDIAN FORECAST SEES MAIN CZECH CENTRAL BANK RATE AT 3.75% 2024 (PVS POLL 3.75%)
reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=CZCBIR%3DECI poll data
Rate decision due Sept 25 at 2:30 p.m. (1230 GMT)
Governor to comment on decision at 3:45 p.m.
14 of 15 analysts in poll see 25-bp rate cut
Median forecast sees main rate at 3.75% at end-2024 (pvs 3.75%)
By Jason Hovet
PRAGUE, Sept 20 (Reuters) -The Czech National Bank is likely to deliver another 25-basis-point interest rate cut next week given on-target inflation, a stabilised currency and a weak global economy, although there is caution over persistent services price rises, a Reuters poll showed on Friday.
The central bank slowed the tempo of easing to 25 basis points in August, from previous 50-bp steps, bringing the main repo rate CZCBIR=ECI down to 4.50% while saying it would approach further cuts with caution.
In the poll, 14 of 15 analysts forecast another 25-bp cut at the next meeting on Sept. 25. One predicted no change.
Further ahead, the median forecast was for the repo rate to fall to 3.75% by the end of the year, unchanged from the previous poll in July. The bank will meet two more times this year after next week.
"Persistency in service prices and a pickup in core inflation suggest some caution, resulting in a 25-bp rate reduction as the most likely option for the September and November CNB decisions," ING economist David Havrlant said.
However, he added a pause in December was possible "unless things turn ugly in manufacturing over the rest of the year."
The Czech economy has see a slow recovery this year with renewed consumer activity after surging inflation in recent years hammered households, curbing their spending power.
Industry is still the weak link, as companies face poor demand for their products from clients in European Union trading partners, including economic powerhouse Germany.
Inflation, though, has been hovering around the bank's 2% target, staying withinthe 1 percentage tolerance band around that.
The crown has also steadied around the 25 per euro level and is 1.8% stronger than levels seen before the last meeting.
The bank's last quarterly staff forecast in August, which is the basis for board discussions on policy, suggested no more cuts until the end of the year.
But rate setter Jan Kubicek said in a Reuters interview published this week that there was still room for rates to decline. Another central banker, Tomas Holub, also told Bloomberg news agency there was still room to cut, and Vice-Governor Eva Zamrazilova also spoke in favour of more easing.
A cautious approach has also been seen in Hungary, where the central bank has been cutting rates. Analysts expect a 25-bp cut at the Hungarian central bank's meeting next week.
Reporting by Jason Hovet, editing by Jan Lopatka and Susan Fenton
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