Czech Central Bank Keeps Rates On Hold


The Czech National Bank kept its key interest rates unchanged for the second straight meeting on Thursday.

The board of CNB maintained its two-week repo rate at 7.00 percent, as expected. This was the highest rate since 1999.

The bank has tightened its monetary policy over the nine consecutive sessions until June 2022.

The discount rate was left unchanged at 6.00 percent and the Lombard rate at 8.00 percent.

In August, consumer price inflation slowed to 17.2 percent but the rate remained elevated and well above the tolerance band of 1-3 percent.

With inflation unlikely to rise much further and the economy on the verge of recession, interest rates are likely to remain on hold over the coming months and that the CNB will be the first central bank in the region to transition to interest rate cuts next year, Capital Economics’ economist Nicholas Farr, said.

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