POLL-Czech rates not seen rising until after 2021
CNB meets on Wednesday, decision at 1230 GMT
All 12 analysts expect no change
Median forecast sees rates on hold throughout 2020, 2021
PRAGUE, Sept 22 (Reuters) - The Czech National Bank is likely to maintain stable interest rates without reverting to easing again although tighter policy will not come before the end of 2021, a Reuters poll showed on Tuesday.
The main two-week repo rate CZCBIR=ECI sits at 0.25% after 200 basis points in cuts earlier this year to cushion the economic blow from the global coronavirus pandemic.
Analysts say interest rates have probably hit bottom even as a new wave of COVID-19 infections stronger than the first grows, raising fears the economy could again face restrictions like those that led to a record contraction in the second quarter.
All 12 analysts in a poll this week expected the Czech central bank to hold fire at its next meeting on Wednesday.
Longer-term, the median forecast saw stable rates continuing this year and in 2021. Five analysts forecast a possible hike in 2021 while five expected tightening to start only in 2022.
"The worsening epidemic situation makes the outlook very unclear and will contribute to the fact that rates will not rise anytime soon," said Komercni Banka economist Michal Brozka, who expects no hike in borrowing costs before 2022.
"(CNB) board members will see the monetary conditions as having been sufficiently loosened but should reflect the risks for the future as the pandemic situation has deteriorated."
The Czech Republic has been hit hard by a renewed spike in COVID-19 cases, showing the second-fastest growth rate in Europe. The government has stressed it does not want to shutter the economy like in March, at the outset of the pandemic.
The crown EURCZK= has weakened sharply this month beyond 27 to the euro for the first time since May, weaker than an average exchange rate of 26.7 expected in the central bank's outlook for the third quarter.
(Reporting by Mirka Krufova and Jason Hovet; Editing by Catherine Evans)
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