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Czech central bank slashes key rate to 1%

The Czech National Bank cut the main interest rate by 0.75 percentage points on March 26 to 1%, following a surprise cut of 0.5 pp on March 16, bringing borrowing costs to their lowest level since July 2018, Czech Radio reported. 

Czech National Bank building, Prague. Photo by V_E/Shutterstock.com

At the same time, the central bank lowered the Lombard rate to 2% and the discount rate to 0.05%. The aim is to mitigate the negative impact of the coronavirus pandemic for Czech companies and households, the bank said in a statement.

After the rate cut, the Czech koruna extended losses while the finance ministry sold huge amounts in debt tenders for a second day as it ramped up borrowing, Czech Radio said.