The Czech National Bank cut interest rates to just 0.25% earlier today and suggested that, should further stimulus be necessary, this would probably take the form of intervention in the foreign exchange markets to weaken the koruna. We don’t expect an immediate move in this direction, but with the economy showing no signs of picking up, we do think the Bank will be forced into action in 2013. Meanwhile, Romanian interest rates were kept on hold today, and policymakers hinted that they would remain unchanged for the foreseeable future.
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