Petr Dubinsky

Czech National Bank Holds Interest Rates

The Czech National Bank left interest rates unchanged in its latest meeting. The primary rate on which interest rates on commercial loans are derived remained at two percent.

The last time the board raised rates was in May. According to CNB Governor Jiri Rusnok, the chance of a future rate increase rose slightly. Two of the seven Bank Board members have already voted to increase. According to Rusnok, the board’s discussion was similar to the two previous meetings. He said the rate could be changed at an upcoming meeting. Next will be in early February.

According to economists, the reason for today’s decision was the uncertain development abroad and the expected fall in inflation.

According to the Governor, inflation will be close to the 3% threshold in the coming quarters. It will be close to the 2% inflation target at the monetary policy horizon.

Rusnok also said that the current November forecast corresponds to an increase in domestic market interest rates in this and next quarter, followed by their decline mid-next year.