Commerzbank analysts, referencing recent remarks by Czech National Bank (CNB) deputy governor Eva Zamrazilova, interpret the CNB's June 18th 25 basis point rate hike as a 'fine-tuning' measure rather than the start of a new tightening cycle. Zamrazilova indicated to the budget committee that the board feels it has 'caught up' and is likely to pause further hikes, with a more dovish stance expected in the near term. The CNB is anticipated to hold rates steady in August, with the possibility of renewed debate in September after new projections are released. Despite this, markets may continue to price in a residual chance of another 25bp hike later in the year, which could provide marginal support for the Czech koruna [1].
In contrast, the Polish zloty is facing headwinds as weaker-than-expected inflation data has erased market expectations for rate hikes in 2026. Polish CPI inflation slowed to 2.5% year-on-year in June from 3.1% in May, falling short of the 2.7% consensus. As a result, FRA contracts that previously anticipated a sequence of rate hikes are now rapidly unwinding those bets. The probability of a rate hike by Poland’s National Bank (NBP) has dropped to nearly zero, and there is growing discussion about potential rate cuts as early as Q4, with some commentators suggesting March 2027 as a realistic timeframe for easing to begin. This shift removes one of the few supports for the zloty, leading Commerzbank to expect the PLN to underperform the Czech koruna in the coming months [2].
Commerzbank further notes that while the Czech koruna may benefit from lingering market expectations of another hike, even if it does not materialize, the Polish zloty is likely to lose ground due to the fading rate hike narrative and the prospect of future rate cuts [1][2].
CONCLUSION
The Czech koruna stands to gain marginal support from the CNB's cautious stance and residual market pricing of further hikes, while the Polish zloty is expected to underperform as inflation data erases rate hike bets and raises the possibility of rate cuts. Market participants are likely to favor the koruna over the zloty in the near term, given the divergent monetary policy outlooks.