Czech c.bank cuts key rates as economy slowly rebounds, inflation eases

The Czech National Bank (CNB) decided on Thursday to cut its benchmark interest rates for the sixth time in a row amid cooling inflation and a slower-than-anticipated economic recovery.

The cut brought the two-week repo rate (2W repo rate), discount rate, and the Lombard rate down by 0.25 percentage point to 4.50 per cent, 3.50 per cent, and 5.50 per cent, respectively.

The new interest rate levels come into effect on 2 August 2024, the CNB said in a statement.

On December 21, the CNB started to trim borrowing costs by a quarter-point, the first cut since June 22, 2022. The CNB made further cuts of half a percentage point on February 8, March 20, May 2, and June 27.

The Czech economy expanded by 0.4 per cent year-on-year and 0.3 per cent quarter-on-quarter, as per preliminary data released by the Statistics Office on Tuesday.

Inflation cooled to the central bank’s target of 2.0 per cent in June, down from 2.6 per cent in May.

Attribution: AP & Czech National Bank (CNB) Statement