Interest Rate in Czech Republic
Czech Republic - Interest Rate
CNB delivers first rate hike of 2019
On 2 May, the Bank Board of the Czech National Bank (CNB) unanimously decided to lift the two-week repo rate by 25 basis points to 2.00%, marking the first rate hike of the year. At the same time, the CNB increased both the Lombard rate and discount rate by 25 basis points to 3.00% and 1.00%, respectively.
The Board’s decision was underpinned by the change in its macroeconomic outlook, with its inflation projections raised compared to the February 2019 forecasts. The shift was in large part due to the recent acceleration in inflation, which reached an over six-year high of 3.0% in March, hitting the upper bound of the CNB’s 1.0%–3.0% tolerance band. The Bank expects that inflationary pressures will remain elevated in the coming months, owing largely to higher administered prices and food prices; however, they are seen gradually easing thereafter on slower wage growth and economic activity, with inflation coming back down to the 2.0% target in early-2020.
In terms of forward guidance, the Bank’s projections alluded to broad stability of rates in the coming year and hence a pause in the tightening cycle which started in mid-2017. That said, analysts contend that further tightening may be warranted if inflation remains stubbornly high or if a notable improvement in external conditions were to materialize, particularly in the Eurozone economy.
The next monetary policy meeting is scheduled for 26 June.
Against this backdrop, FocusEconomics Consensus Forecast panelists see the two-week repo rate at 2.15% at the end of 2019, before increasing to 2.30% at the end of 2020.
Czech Republic - Interest Rate Data
|Policy Interest Rate (%)||0.05||0.05||0.05||0.05||0.50|
5 years of economic forecasts for more than 30 economic indicators.
Czech Republic Interest Rate Chart
Czech Republic Facts
|Bond Yield||1.59||-1.85 %||Jun 14|
|Exchange Rate||22.67||-0.66 %||Jun 14|
|Stock Market||1,051||-0.10 %||Jun 14|
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June 11, 2019
Consumer prices rose 0.7% from the previous month in May, following April’s 0.1% month-on-month increase.
June 6, 2019
Industrial production rose a solid 3.3% year-on-year in April, a five-month high and well above March’s marginal 0.2% increase.
June 3, 2019
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, remained at April’s 46.6 in May, marking the six successive monthly contraction of the all-important sector and the lowest level since December 2012.
May 31, 2019
According to a detailed breakdown of GDP released by Czech Republic’s Statistical Institute on 31 May, the economy grew a seasonally-adjusted 2.6% year-on-year in the first quarter, a notch above the 2.5% growth rate shown in the preliminary release and matching Q4 2018’s increase.
May 24, 2019
The economic sentiment indicator, a composite confidence indicator published by the Czech Statistical Office (CSO), declined to a near three-year low of 95.7 in May from 97.1 in April.