Czech National Bank


CNB Holds Basic Interest Rate At 0.75%


Prague, May 3 (CTK) – The Bank Board of the Czech National Bank (CNB) left interest rates unchanged today, and the basic rate stayed at 0.75 percent, CNB spokesman Marek Zeman has said.


At a press conference after the policy meeting, CNB governor Jiri Rusnok said that six out of seven Bank Board members voted for no rate adjustment. One member was in favour of a growth in the key interest rate, by 0.25 percentage points to 1 percent.


The CNB last increased interest rates early in February, with the key rate rising by 0.25 percentage points to 0.75 percent. In March, no changes were made. Rusnok then said that following February’s rise another lifting can be expected at the end of this year at the earliest, but mainly next year.


The CNB has taken a wait-and-see approach towards new rate hikes, said ING chief economist Jakub Seidler. It wants to see the impacts of the previous rate lifting (three times) on the economy and also wants to have more information about the euro zone’s economic development and the European Central Bank’s timing of the end of its non-standard monetary policy, said Seidler.


If the favourable economic development continues in the Czech Republic, then strong household consumption combined with wage growth and slower currency appreciation can possibly open up space for two rate hikes in the second half-yearly period, Seidler said.


The rate-setting meeting was attended by all seven members of the central bank’s governing board.