Czech National Bank Policy Rate Unchanged

March 28, 2019

The Czech two-week repo rate was lifted from a low of 0.05% by 45 basis points in 2017 and 125 basis points last year to its current level of 1.75%. Two of seven rate policy deciders, who favored another 25 basis point hike now, were overruled by a majority to leave the key interest rate unchanged at this week’s scheduled review. The Bank Board observed that “GDP and prices are rising at a faster pace than forecast, whereas wages are increasing more slowly.” It was also agreed that “the possibility of a disorderly Brexit and growth in protectionist measures in global trade are still sources of uncertainty.” With the ECB and Fed in pause mode, this was not a time for Czech policy to plow forward on rate normalization.

Copyright 2019, Larry Greenberg. All rights reserved. No secondary distribution without express permission.



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