The Czech National Bank’s Bank Board unanimously held the two-week repo rate at 3.75%, judging that the June increase and higher longer-term interest rates had sufficiently tightened monetary and financial conditions, while core inflation remained elevated and risks were inflationary overall. After holding the rate at 3.50% from September 2025 through May 2026, the Board raised it by 25 basis points in June and held it in August. Inflation remains close to the 2% target but is forecast to increase temporarily in late 2026 and early 2027, with persistent services inflation, rapid wage growth and elevated credit and property-price growth maintaining domestic price pressures. Year-on-year gross domestic product growth slowed to 1.9% in the second quarter from 2.2%, with domestic demand remaining the main source of growth. Commodity-market developments and the Middle East conflict pose upside risks, while weak performance in some euro-area economies, a possible global asset-price correction and trade barriers could weigh on activity or inflation. The Board said relatively tight policy remains necessary and signalled that its next decision will be between holding rates and raising them.
2026-09-17Czech National Bank
Czech National Bank Holds Policy Rate at 3.75%
The Czech National Bank unanimously held the two-week repo rate at 3.75%, judging that June’s increase and higher longer-term rates had sufficiently tightened conditions, while core inflation remained elevated and risks were inflationary overall. The Bank said relatively tight policy remains necessary and signalled its next decision will be between holding and raising rates.