Czech Republic: Central Bank stays put for 19th consecutive month
March 29, 2012
At its 29 March monetary policy meeting, the Czech National Bank left the two-week repurchase rate unchanged at a record low of 0.75%, in a decision universally expected by market analysts. The Central Bank has not changed the main monetary policy rate since May 2010. At its current level, the two-week repurchase rate remains 25 basis points below the European Central Bank's main policy rate. As in previous statements, the Central Bank argued that, in line with forecasts, inflation will rise temporarily to just above 3% this year, owing to the January VAT increase, but will fall back below the Bank's 2.0% 1.0% inflation target at the beginning of 2013. Moreover, monetary authorities acknowledged that recent economic indicators continue to suggest that economic activity is losing momentum. The next monetary policy meeting is scheduled for 3 May.
Author: Ricardo Aceves, Senior Economist