CNB Forecasts Interest Rates Steady Through 2019

Andrej Babiš, CNB, Miloš Zeman

Prague, March 29 (CTK) – Interest rates cannot be expected to increase again sooner than at the end of 2018 after their February hike, growing mainly in 2019, based on the Czech National Bank’s (CNB) forecast, central bank governor Jiri Rusnok said at today’s press conference after the CNB Bank Board meeting.


The CNB governing board left interest rates unchanged, with the basic rate staying at 0.75 percent.


All seven members of the CNB Bank Board voted for no change.


The CNB forecast envisages this year’s inflation above the central bank’s 2 percent target, going back at the beginning of next year.


“The Bank Board assessed the forecast’s risks as mildly anti-inflationary,” Rusnok said.


On the other hand, the Czech crown’s strengthening to the euro being slower than envisaged in the forecast for the coming quarters can pose an inflationary risk, according to the Bank Board.


If the crown firmed slower than the forecast says, there would likely be room for a quicker interest rates hike, Rusnok said.


The last time the CNB raised interest rates was at the beginning of February, increasing the basic rate by 0.25 percentage point.