Czech Republic: Central Bank stays put for the 14th consecutive month
August 4, 2011
At its 4 August meeting, the Czech National Bank left the two-week repurchase rate unaltered at a record low of 0.75%, in a decision widely expected by the market. The Central Bank has not modified the main policy rate since May 2010, when authorities cut interest rates by 25 basis points. At the current level, the two-week repo rate remains 75 basis points below the European Central Bank's policy rate. In its statement, the Central Bank reckoned that headline inflation remains close to its inflation target of 2.0% 1.0% over the near-term horizon and that inflation pressures remain at bay. Moreover, monetary officials anticipate that economic activity will slow this year, on the back of the government's fiscal consolidation plan. The next monetary policy meeting is scheduled for 21 September.
Author: Ricardo Aceves, Senior Economist