* reuters://realtime/verb=Open/url=cpurl://apps.cp./Apps/cb-polls?RIC=CZCBIR%3DECI
poll data

* 10 analysts see main rate rising by 25 bps from 0.25%

* All analysts see at least one more hike by year-end

* Majority of central bankers flagged June hike as possible

* Rates unchanged since May 2020, last hike Feb 2020

* Decision June 23 at 2:15pm (1215 GMT), presser 3:45pm
(1345 GMT)

PRAGUE, June 18 (Reuters) – The Czech National Bank is seen
raising interest rates on June 23 after 13 months of stable
policy as inflation pressures mount, with the economy showing
strong signs of recovery as vaccinations help to bring the
COVID-19 pandemic under control.

The central bank has held its main two-week repo rate
at 0.25% since May 2020 after it made 200 basis
points of emergency cuts as the pandemic hit.

Among 12 respondents in the Reuters poll, 10 saw a 25-basis
points hike at next Wednesday’s policy meeting, while two
predicted no change.

A hike would be the bank’s first policy tightening since
February 2020, when it raised the main rate to 2.25%.

It would also put the bank alongside a handful of other
rate-setters seen tightening this year, including Hungary’s
central bank, which holds a policy session on June 22.

Elsewhere in Europe, Norway’s central bank could hike its
key interest rate twice in the second half of this year as it
looks set to exit pandemic-driven stimulus measures.

Looking further ahead, five out of 11 respondents saw
another Czech hike by the end of the third quarter.

All of the respondents expected at least one more hike by
the end of the year, bringing the main rate to 0.75%.

Four analysts saw two more hikes after June, putting the
main rate at 1.00% by the end of 2021.

Five central bankers from the seven-seat board gave hawkish
signals earlier this week, setting the scene for a possible

The market has been pricing in growing chances of a
near-term hike as well.

The 1×4 forward rate agreements, projecting where the market
sees spot interbank rates one month from now, were quoted at
0.61% on Friday, up 23 basis points over the past month and
compared with the 0.44% at which the 3-month Prague interbank
offered rate (PRIBOR) fixed on Friday.

Signals from the economy have been positive, with a tight
labour market, strong purchasing managers’ surveys, and
industrial output up 55.1% in April from a year ago when supply
chains dried up due to global coronavirus restrictions.

Although headline inflation eased to 2.9% year-on-year in
May, it was still near the top of the central bank’s tolerance
range of 1-3%, while core inflation, which strips items beyond
monetary policy control, remained above 3%.
(Reporting by Mirka Krufova and Robert Muller
Editing by Mark Potter)