CEE central banks to conclude easing after 2025

In one of our Daily reports last week, we wrote that monetary easing is expected to end in 2024, resuming later in 2025. Today, we are extending our horizon to include the entirety of the easing cycle. The terminal interest ratesdefined as the rates at which the easing cycle endsare quite uniform among the CEE countries with their own currency. In Czechia, the terminal rate is the lowest at 3%, suggesting an anticipated reduction of 100bp by Q2 2026. Other CEE central banks face a more extended path, while the ECB should be done in Q3 2025 at 2.25%. In Poland, we foresee a decrease of 175 bp from the base rate (5.75%), with the easing cycle expected to conclude in the third quarter of 2026. In Hungary, we anticipate a reduction of 225 bp from the current rate of 6.5% by Q2 2026. The Romanian and Serbian central banks will require additional time before concluding their monetary easing, with predicted terminal rates of 4% expected to be reached only by the second quarter of 2027. In Romania, the terminal rate is projected to be slightly expansionary, whereas in Hungary, it is expected to be more contractionary.