Saturday, September 24, 2011

Czech National Bank Keeps Repo Rate at 0.75%

The Ceska Narodni Banka (CNB) kept the two-week repurchase rate on hold at 0.75% as expected.  The Bank also held the the discount rate unchanged at 0.25% and the Lombard rate at 1.75%.  The Bank said: "At this moment, when we look at risks to our forecast, which are principally driven by external environment, they are quite markedly in the direction of lower rates, and less markedly in the direction of lower inflation."

The Czech central bank also kept the repurchase rate unchanged at its August meeting this year, its last change was a 25 basis point cut in May 2010.  The Czech Republic reported annual inflation of 1.7% in August and July, 1.8% in June, 2% in May, 1.6% in April, and 1.7% in March this year, and above the Bank's official inflation target of 2%.  The Czech Republic's currency, the Koruna (CZK) has gained about 2% against the US dollar this year, and the USDCZK exchange rate last traded around 18.32


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