Czech Republic: Central Bank maintains interest rate unaltered in one full year
May 5, 2011
At its 5 May meeting, the Central Bank left the two-week repurchase rate unchanged at a record low of 0.75%, in a move broadly expected by market analysts. Monetary officials have maintained the current policy rate since May 2010, when the Bank last cut interest rates by 25 basis points. At the current level, the two-week repo rate remains 50 basis points below the European Central Bank's main policy rate. In its statement, monetary officials argued that headline inflation remains close to the inflation target of 2.0% 1.0% over the near-term monetary policy horizon. In addition, authorities acknowledged that inflation pressures from domestic demand remain absent, as economic growth will slow this year as a result of the fiscal measures adopted by the government. The next monetary policy meeting is scheduled for 23 June.
Author: Ricardo Aceves, Senior Economist