The Czech National Bank raised its two-week repo rate by 0.25 percentage point to 3.75%, with six board members backing the move and one preferring no change, saying tighter policy was needed to contain still-elevated core inflation and keep headline inflation close to the 2% target over the monetary policy horizon despite weaker expected growth this year than in the May forecast. It also increased its other key interest rates by the same amount. Inflation has been near target since January 2024, but the Monetary Department’s updated forecast sees a risk of a slight temporary pickup in late 2026 and early 2027, while core inflation has stayed just below 3% for six months without declining; GDP growth slowed to 2.2% in 2026 Q1, and the board cited accelerating credit growth, a tight labour market, rapid wage growth and still-elevated property price growth as domestic inflation pressures. Foreign trade acted against growth, and the board said future rate decisions would also depend in part on koruna exchange rate developments and fiscal policy’s effect on the economy. It added that, despite the de-escalation of the Middle East conflict, it would keep watching geopolitical events, key foreign central bank actions, financial markets, trade relations, weak activity in some euro area economies and the war in Ukraine. The board assessed risks to the inflation outlook as overall inflationary and said it would consider any further moves very carefully based on incoming data and the pe
Czech National Bank2026-06-18
Czech National Bank raises two-week repo rate by 25 basis points to 3.75%
The Czech National Bank raised its two-week repo rate by 0.25 percentage point to 3.75% in a 6 to 1 vote, and increased its other key interest rates by the same amount, citing still-elevated core inflation and the need to keep headline inflation close to the 2% target despite weaker expected growth than in the May forecast. The board said risks to the inflation outlook remain overall inflationary and that any further moves will be considered very carefully in light of incoming data, including domestic inflation pressures, the koruna exchange rate and fiscal policy.