Czech National Bank

February 6, 2020

The Czech rate decision, a hike of the 2-week Czech National Bank repo rate to 2.25% from 2.0%, was a surprise and reflects a razor-thin 4-3 voting margin by the Monetary Board. Due in part to higher indirect taxes, CPI inflation has risen to 3.2%, highest since late 2012, and officials don’t expect such to settle back to the 2% target until late in its policy-relevant time frame. A released statement projects a gradual but moderate acceleration in the sluggish Czech growth rate. The previous two Czech interest rate hikes had been engineered in November 2018 and May of last year. The rate is now its highest since the Great Recession.

Copyright 2020, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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