MNI CNB Preview - Dec 2025: Repo Rate To End 2025 At 3.50%

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Executive Summary:

• The CNB is widely expected to keep the policy rate unchanged.
• Recent communications reaffirmed on-hold guidance.
• Headline inflation eased in November but familiar risks remain.

The Czech National Bank (CNB) will almost certainly deliver a well-telegraphed unanimous decision to keep the two-week reference rate unchanged at 3.50% at the final meeting of this year as concerns about familiar inflationary risks continue to linger. Although headline inflation moderated to +2.1% Y/Y in November, the property market is running hot, wages are still growing at pace, and there is considerable uncertainty about the fiscal outlook under the new government. Meanwhile, the key interest rate already sits at the upper end of the range of neutral-rate estimates, keeping the room for further rate cuts limited.