Czech interest rates cut to stem rise of currency

CZECH REPUBLIC - The Czech central bank yesterday cut interest rates to lower than in the eurozone, in an attempt to halt the headlong appreciation of the country's currency.

The higher-than-expected, 75 basis point cut in the two-week repo rate to a historic low of 3.0 per cent dramatically illustrates the convergence effect in the candidate countries ahead of membership of the European Union, expected in 2004.

But it also demonstrates the central bank's concern that the appreciation of the cr