Growth fears outweigh depreciation threat for CNB

The Czech National Bank (CNB) has cut its key interest rate to 1.75%, the lowest level in more than three years, in an attempt to stave off recession despite concerns about koruna's weakening.

The central bank's half-point cut highlights concern over the domestic economy, which it now sees as contracting in the coming year. The CNB said Thursday that it expected the domestic economy to shrink by 0.3%, a significant u-turn since its November prognosis of 2.9% growth.

Zdenek Tuma, the governor of

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