Czech Republic Interest Rate

CNB keeps rates unchanged in August after June hike

Hold matches market expectations: At its 6 August meeting, the Czech National Bank (CNB) kept its two-week repo rate unchanged at 3.75%, following its 25 basis point increase in June—the first since mid-2022. The hold was unanimous and had been penciled in by markets.

Rates held amid ongoing inflation risks: The decision followed the CNB’s assessment that domestic inflationary pressures remained elevated in the face of strong wage growth, robust credit expansion, resilient domestic demand, rising money supply and an expansionary fiscal stance. Moreover, the impact of the Iran conflict and higher energy prices continued to present an additional inflationary risk, leading the Bank to opt for a cautious stance.

Most panelists see rates on hold through year-end: The CNB stressed that future decisions will remain data-dependent and kept all options on the table for the remainder of this year. Most of our panelists see rates on hold throughout the remainder of 2026, however the rest expect a further 25 basis point hike. The Bank will reconvene on 17 September.

Panelist insight: Jiri Polansky, analyst at Erste Bank, commented: “For the remainder of this year, however, the CNB is likely to choose between maintaining rates at current levels and delivering one additional rate hike. We view the probabilities of these two outcomes as broadly balanced, with the final decision depending on a range of factors, from the ECBs policy stance to geopolitical developments. At present, we lean slightly towards the scenario of unchanged rates.”

How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects Czech interest rate projections for the next ten years from a panel of 25 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable interest rate forecast available for Czech interest rate.

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