Accelerating money supply growth
|On the radar
-
Unemployment rate in Romania dropped to 5.6% in February.
-
Today, at 11 AM CET, flash inflation will be released in Croatia as well as other HICP flash estimate for Eurozone countries.
-
Tomorrow, Poland and Romania central banks have rate setting meetings.
Economic developments
M3 money supply growth in the region (as well as in Eurozone) has accelerated in the recent months. Within the region, the money supply growth was negative only in Hungary in the second half of 2023. In Czechia, Poland and Romania it had been slowing down but sustained positive growth dynamics as opposed to Hungary. The money supply growth bottomed out in the third quarter of 2023 and since then it has been accelerating. We see the change of the trend as a positive sign that supports our story of economic recovery. Further, easing credit conditions should improve the situations of households.
Market developments
According to the minutes from the March 20 meeting of Czech central bank, most of the policymakers preferred to lower interest rates in cautious steps due to lingering inflation risks. In particular, many central bankers emphasized the upside risks to inflation at the forecast horizon and the effort not to surprise the financial market. Further, rising expectations for the neutral policy rate to be higher than in the past could have played a role as well. It may be also a factor in the future interest rate decisions limiting the size of monetary easing in Czechia. There were no major changes on the FX market compared to Tuesday. On the bond market the long-term yields have moved up.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.