Czech Rate-Cut Bets Rise as Growth, Inflation Forecast Reduced

Traders in interest-rate derivatives raised bets that Czech borrowing costs will drop after policy makers cut the country’s economic-growth and inflation forecasts and the European Central Bank reduced its main rate.

Forward-rate agreements fixing three-month interest in nine months dropped six basis points, or 0.06 percentage point, to 1.005 percent by 4 p.m. in Prague. The FRA contract traded 15 basis points lower than the three-month Prague Interbank Offered Rate to which it settles, double the difference a week ago.

To contact the reporter on this story: Krystof Chamonikolas in Prague at kchamonikola@bloomberg.net

To contact the editor responsible for this story: Gavin Serkin at gserkin@bloomberg.net

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