Czech National Bank

December 21, 2017

The CNB by a 5-2 margin voted to retain the interest rate structure, with a main 2-week repo rate of 0.50% flanked by a 0.05% discount rate and a 1.0% Lombard rate. There had previously been increases in the repo rate of 25 basis points in early November and 20 bps last August, and the two dissents that were cast wanted a third increase to 0.75%. Czech CPI inflation of 2.9% in October was the highest since 2012, and November’s 12-month increase was also closer to 3% than the 2% target. Explaining this year’s tightening in a released briefing, officials do not project inflation returning to target until late 2018 or early 2019. Growth in 2018-2019 will average slightly over 2.0%.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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