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Czech central bank raises interest rates for first time in nine years

Legacy of currency defence may cause future problems, analyst argues

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The Czech National Bank (CNB) raised its policy rates for the first time in more than nine years today (August 3).

The CNB raised its main policy rate, the two-week repo rate, by 20 basis points from 0.05% to 0.25%. This was the first change in the rate since it was lowered to 0.05%, or a “technical zero”, in November 2012, and the first raise in policy rates since February 2008. The CNB also increased the Czech Republic’s Lombard rate by 25 basis points to 0.50%.

The monetary policy

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