{"id":7119,"date":"2019-05-02T15:34:18","date_gmt":"2019-05-02T14:34:18","guid":{"rendered":"https:\/\/praguebusinessjournal.com\/?p=7119"},"modified":"2019-05-02T15:34:18","modified_gmt":"2019-05-02T14:34:18","slug":"cnb-raises-interest-rates-to-highest-level-in-decade","status":"publish","type":"post","link":"https:\/\/praguebusinessjournal.com\/cnb-raises-interest-rates-to-highest-level-in-decade\/","title":{"rendered":"CNB Raises Interest Rates To Highest Level In Decade"},"content":{"rendered":"<p>The Czech central bank raised interest rates to the highest in a decade as a persistently weak koruna adds to inflationary pressure.<\/p>\n<div class=\"softwall\" data-position=\"2\"><\/div>\n<p>After leading Europe with five hikes last year, the bank raised its benchmark a quarter-point to 2 percent on Thursday. At the previous three meetings, it kept rates unchanged as Brexit, trade wars, and weaker demand from neighboring Germany posed risks to economic growth.<\/p>\n<div class=\"softwall\" data-position=\"4\"><\/div>\n<p>\u201cDespite some persisting foreign uncertainties, recent Czech National Bank board member comments signaled there\u2019s higher support to back an interest-rate hike today,\u201d ING Groep NV said in a report before the decision. \u201cThis is due to high inflation, a weak koruna and tentatively declining Brexit uncertainty.\u201d<\/p>\n<p>&nbsp;<\/p>\n<p>The Czechs stand out as they defy a global pullback from monetary tightening led by the U.S. Federal Reserve and the European Central Bank. Rapid wage growth and the koruna\u2019s inability to strengthen as forecast have helped push inflation to the top of rate-setters\u2019 1 percent-3 percent tolerance band<\/p>\n<p>&nbsp;<\/p>\n<p>In comparison, Poland plans to keep borrowing costs at a record low until at least 2020 despite a\u00a0<a class=\"terminal-news-story\" title=\"Polish Inflation Hits Most Since 2017, Stoking Rate Pressure (1)\" href=\"https:\/\/www.bloomberg.com\/news\/terminal\/PQRPRO6S9728\" target=\"_blank\" rel=\"noopener noreferrer\">jump in inflation<\/a>in April, while Hungary is in wait-and-see mode after taking a first tightening step in March.<\/p>\n<p>&nbsp;<\/p>\n<p>Czech central bank Governor Jiri Rusnok will comment on the rate decision and release the highlights of new quarterly staff forecasts at 2:15 p.m. in Prague.<\/p>\n<h3><\/h3>\n<h3 id=\"new-model\">New Model<\/h3>\n<p>&nbsp;<\/p>\n<p>In their deliberation, the seven board members may have taken into account an alternative set of projections based on a new forecasting model the bank plans to switch to in the second half of 2019. The tool is designed to more accurately predict factors such as the exchange rate, household spending and the impact of price developments abroad.<\/p>\n<figure class=\"figure-expandable\" data-type=\"image\" data-id=\"337133401\" data-image-type=\"photo\" data-image-size=\"half\" data-align=\"right\"><figcaption>\n<div class=\"news-figure-credit credit\"><\/div>\n<\/figcaption><\/figure>\n<p>The rate increase hike was predicted by most economists polled by Bloomberg. Before the meeting, forward-rate agreements showed money-market investors saw at least a year of borrowing costs staying on hold after the hike.<\/p>\n<p>&nbsp;<\/p>\n<p>\u201cThe CNB is likely to downgrade its economic forecasts when it publishes the new inflation report,\u201d said Jiri Pour, a Prague-based economist at UniCredit SpA. \u201cWe expect the hike to be the last one in the current cycle.\u201d<\/p>\n<p>&nbsp;<\/p>\n<p>Via <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2019-05-02\/weak-koruna-emboldening-europe-s-top-hawks-to-hike-czech-rates\">Bloomberg<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Czech central bank raised interest rates to the highest in a decade as a persistently weak koruna adds to inflationary pressure. After leading Europe with five hikes last year, the bank raised its benchmark a quarter-point to 2 percent on Thursday. At the previous three meetings, it kept rates unchanged as Brexit, trade wars, &#8230; <a title=\"CNB Raises Interest Rates To Highest Level In Decade\" class=\"read-more\" href=\"https:\/\/praguebusinessjournal.com\/cnb-raises-interest-rates-to-highest-level-in-decade\/\" aria-label=\"Read more about CNB Raises Interest Rates To Highest Level In Decade\">Read more<\/a><\/p>\n","protected":false},"author":5,"featured_media":5092,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false}}},"categories":[18,3],"tags":[241],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>CNB Raises Interest Rates To Highest Level In Decade - Prague Business Journal<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/praguebusinessjournal.com\/cnb-raises-interest-rates-to-highest-level-in-decade\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"CNB Raises Interest Rates To Highest Level In Decade - Prague Business Journal\" \/>\n<meta property=\"og:description\" content=\"The Czech central bank raised interest rates to the highest in a decade as a persistently weak koruna adds to inflationary pressure. 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