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Czech central bank hikes key rate again

Banking

The Czech central bank raised its key interest rate further and the increase was more than expected, citing the outlook for higher inflationary pressures and slower growth in the coming months, Czech Radio reported.

The bank board decided to raise the two-week repo rate by 125 basis points to 2.75%, the Czech National Bank said in a statement on Thursday.

The previous change in the key interest rate was a 75 basis points hike late September.

"This forceful interest rate increase aims to return inflation close to the target at the monetary policy horizon, i.e. 12-18 months ahead, and to support the anchoring of firms' and households' inflation expectations," the bank said.

Policymakers also increased the discount rate to 1.75% and the Lombard rate to 3.75%.

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