Czech National Bank Reduces Two-Week Repo Rate to 1.0%

March 26, 2020

Ten days after an inter-meeting 50-basis point rate reduction on March 16, Czech National Bank officials at today’s scheduled meeting authorized a further 75-basis point rate cut, declaring in a released statement that the Czech economy likely faces a strong domestic recession for most of the rest of 2020 and that such will likely exert a pronounced disinflationary effect. The central bank Board also agreed to lower the bank capital buffer to 1.0%. “In view of the extraordinary nature of the present situation, the Bank Board announces that it is prepared to lower interest rates further and adopt measures to address any potential liquidity problems in the Czech financial sector.” Excessive fluctuations of the korona will be met with intervention resistance.

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



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