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Czech National Bank lowers rate for 3rd time in a row

Analysis

Photo by BalkansCat / Shutterstock.com

The Czech Republic’s central bank cut its key interest rate for the third time in a row and unveiled additional measures to provide more liquidity to a financial market battered by the COVID-19 pandemic, RTT News reports. 

Ceska Narodni Banka building in Prague. Photo by BalkansCat / Shutterstock.com

The board of the Ceska Narodni Banka (Czech National Bank) voted 5-2 to cut the two-week repo rate by 75 basis points to 0.25%; economists had expected a 50 basis points reduction.

The key interest rate was lowered by 75 basis points on March 26 and by another 50 basis points on March 16, after it was hiked by a quarter-point in February.

The Lombard rate was cut to 1%, although the discount rate was left unchanged at 0.05%.

The CNB also presented the latest set of macroeconomic forecasts for the Czech economy, which project a severe contraction this year, RTT News says.

Gross domestic product is forecast to fall 8% this year and recover with 4% growth next year. 

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