- Decision
- Maintain
- Rate change
- 0 bps
- two-week repo rate
- 3.5%
The Czech National Bank (CNB) Bank Board kept the two-week repo rate unchanged at 3.50 %, leaving the discount and Lombard rates at 2.50 % and 4.50 %, respectively, without offering new economic commentary. Following a 25 bp cut in May 2025, the policy rate has been held steady at 3.50 % in every meeting since. In its most recent detailed assessment in December 2025, the Board noted headline inflation had hovered around the 2 % target since January 2024 and was expected to stay slightly above that level through 2026, while core inflation remained elevated amid tight labour conditions, 7.1 % wage growth and Q3-2025 GDP growth of 0.8 % q/q and 2.8 % y/y. At that time it highlighted upside risks from credit expansion, money supply growth, services and property prices, and fiscal spending, countered by the possibility of a stronger koruna and weaker euro-area activity. The Board has said future decisions will hinge on incoming data and that maintaining a relatively tight stance is necessary to ensure inflation stays close to target.
Rate evolution
The Czech National Bank lowered the two-week repo rate by 25 basis points to 3.5%, held it in December and again in March and May 2026, raised it by 25 basis points to 3.75% on 18 June, and kept it unchanged on 6 August and 17 September, when all seven members backed the hold. It said easing room was limited because domestic inflation pressures persisted even with inflation near or within the tolerance band around the 2% target, citing elevated core and services inflation, strong wage growth, a tight labour market, firmer household consumption, rising property prices and strengthening credit and money growth, while weak external demand, trade barriers and geopolitics clouded activity. Across the December, March and May holds, the Bank Board continued to describe policy as relatively tight, while its risk assessment moved from modestly inflationary overall to inflationary overall and then balanced overall as domestic upside risks were increasingly offset by a stronger koruna, weak euro area activity and the risk of a global asset-price correction.
In June, the Bank Board returned the risk assessment to inflationary overall and said the increase would help lower core inflation and maintain a low-inflation environment, while on 6 August it judged that the move had delivered the desired tightening of monetary conditions and shifted to assessing incoming data, the outlook, inflationary risks and the effects of policy restriction as core inflation remained just below 3% without a significant downward tendency for eight months. On 17 September, it said the June increase had so far sufficiently tightened monetary conditions and that higher longer-term interest rates had also tightened financial conditions, although core inflation remained elevated and the upside risk from commodity market developments had intensified. The Bank Board again assessed risks as inflationary overall, citing persistent core and services inflation, credit growth and debt-financed public spending, rapid wage growth, a tight labour market and property prices, while weak euro area activity and a possible global asset-price correction could have an anti-inflationary effect, and said continued tight monetary policy was needed, with its next decision to be between holding the policy rate and raising it.