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The Czech National Bank raised its key interest rate unexpectedly on February 6, after holding it unchanged for five policy sessions in a row. 

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The bank board, led by CNB Governor Jiří Rusnok, decided to raise the two-week repo rate by 25 basis points to 2.25%, the central bank said in a statement. Economists had widely expected the rate to be left unchanged.

The decision comes after annual inflation rate increased to 3.2% in December, the highest since October 2012 and well above the central bank’s midpoint target of 2%.

The previous change in the key rate was a quarter-point hike in May last year. The discount rate was raised to 1.25% and the Lombard rate to 3.25%, RTT News reported.