Eleven out of 12 analysts in the poll said the bank will not announce any postponement of the planned exit, now seen in the second half of 2016 at the earliest. The bank has already delayed the exit several times as deflationary pressures from weak energy prices prevent a revival in consumer price growth.
The poll showed that the bank is likely eventually to delay the end of the regime again sometime in the coming months.
Only three of 14 analysts pushed back their forecast of exit timing, now expected in the range from the second half of 2016 to the third quarter of 2017. The previous poll in February gave the earliest exit timing in the second quarter of 2016.
The crown
has gained 1.1 percent against the euro since the beginning of this year, and in March it touched its strongest level since the interventions regime was launched in November 2013.All the respondents said the bank would be at some point forced to defend the cap preventing the crown from strengthening beyond 27 crowns per euro . Several members of the CNB board said last week the bank did not need to adjust the level of its cap on the crown, but was ready to defend it and keep the policy in place for longer if deflationary pressures from abroad kept coming. Czech consumer prices grew 0.1 percent annually in February. The bank said at its last monetary meeting on Feb. 5 it would tolerate zero, or even mildly negative inflation during 2015, as it expects price growth pace to move towards the CNB's 2 percent target in 2016.The following table summarizes the results of a regular Reuters poll on interest rate forecasts of analysts focusing on the Czech economy.The poll was conducted among 16 analyst groups between March 17 and 23. =============================================================================== CNB Amount Timing Amount 2wk repo action of of next of next end end endOrganization March 26 change change change Q2/16 Q3/16 Q4/16=============================================================================== 1) Capital Economics no move --- --- --- 0.05 0.05 0.05 2) Ceska Sporitelna no move --- Q4/17 +25 bps 0.05 0.05 0.05 3) Citibank no move --- Q1/17 +20 bps 0.05 0.05 0.05 4) CN Finance no move --- Q4/16 +20 bps 0.05 0.05 0.25 5) CSOB unit of KBC no move --- H1/17 +20 bps 0.05 0.05 0.05 6) Deloitte Advisory no move --- H1/17 +20 bps 0.05 0.05 0.05 7) GE Money Bank no move --- H2/16 +20 bps 0.05 --- --- 8) Generali PPF AM no move --- H2/17 +20 bps 0.05 0.05 0.05 9) ING FM no move --- Q2/17 +25 bps 0.05 0.05 0.0510) J&T Banka no move --- H1/17 +20 bps 0.05 0.05 0.0511) Komercni Banka no move --- Q3/16 +45 bps 0.05 0.50 0.7512) Moody's Analytics no move --- Q1/17 +25 bps 0.05 0.05 0.0513) Next Finance no move --- H2/17 +25 bps 0.05 0.05 0.0514) Raiffeisenbank no move --- Q4/16 +20 bps 0.05 0.05 0.2515) Roklen Finance no move --- Q1/17 +25 bps 0.05 0.05 0.0516) UniCredit GR no move --- H1/17 +20 bps 0.05 0.05 0.05================================================================================ 2 week repo at the end of Q2/16 Median 0.05 2 week repo at the end of Q3/16 Median 0.05 2 week repo at the end of Q4/16 Median 0.05 ================================================================================Question: Will the central bank need to adjust its crown target to a weaker level from the current "close to" 27 crowns to the euro target before exiting interventions?Organization Timing Level (EUR/CZK) ================================================================= 1) Capital Economics yes H1/15 --- 2) Ceska Sporitelna no --- --- 3) Citibank --- --- --- 4) CN Finance no --- --- 5) CSOB unit of KBC no --- --- 6) Deloitte Advisory no --- --- 7) GE Money Bank no --- --- 8) Generali PPF AM no --- --- 9) ING FM no --- --- 10) J&T Banka no --- --- 11) Komercni Banka no --- --- 12) Moody's Analytics --- --- ---13) Next Finance yes H2/16 26.5014) Raiffeisenbank no --- ---15) Roklen Finance yes H1/16 28.0016) UniCredit GR no --- --- ===============================================================================Question: A)When will the central bank begin to exit its intervention regime?B)Will the central bank gradually end its intervention regime, for example by slowly lowering its EUR/CZK target level in stages?C)Will the central bank accompany exit from the intervention regime by an immediate concurrent rate increase?Organization Question A Question B Question C ====================================================================== 1) Capital Economics --- --- --- 2) Ceska Sporitelna Q3/17 yes no 3) Citibank Q4/16 --- --- 4) CN Finance --- no no 5) CSOB unit of KBC H1/17 yes no 6) Deloitte Advisory Q4/16 no no 7) GE Money Bank H2/16 no no 8) Generali PPF AM Q1/17 no no 9) ING FM Q3/16 --- ---10) J&T Banka H1/17 --- yes11) Komercni Banka Q3/16 --- ---12) Moody's Analytics H2/16 yes no 13) Next Finance H1/17 yes no 14) Raiffeisenbank H2/16 no no15) Roklen Finance Q4/16 --- yes16) UniCredit GR Q4/16 no ---======================================================================Question: D) Will the central bank announce a delay to its expected exit at its March 26 meeting? If yes, until which period. E) Do you expect the bank will be forced to defend the current CZK level?F) Do you believe the bank will be able to resist a potential market test of the level?Organization Question D Question E Question F ====================================================================== 1) Capital Economics --- --- --- 2) Ceska Sporitelna no yes yes 3) Citibank --- --- --- 4) CN Finance no yes yes 5) CSOB unit of KBC --- yes yes 6) Deloitte Advisory no --- yes 7) GE Money Bank no yes yes 8) Generali PPF AM no yes yes 9) ING FM no yes yes10) J&T Banka yes yes yes11) Komercni Banka no --- yes12) Moody's Analytics --- yes yes13) Next Finance no yes yes14) Raiffeisenbank no yes yes15) Roklen Finance no yes yes16) UniCredit GR no yes yes====================================================================== (Reporting by Mirka Krufova; Editing by Crispian Balmer)
