Czech National Bank Leaves Key Rate Unchanged

2026-08-06 12:45 By Larissa Caser 1 min. read

The Czech National Bank left its two-week repo rate unchanged at 3.75% in August 2026, pausing after delivering its first interest rate hike since 2022 at the previous meeting.

Although headline inflation remained below target for most of the year, policymakers said underlying inflationary pressures persisted, with core inflation remaining elevated and requiring a sufficiently restrictive monetary policy stance.

Meanwhile, economic growth slowed to 2% in the second quarter from 2.2%, while the labor market remained tight.

The bank also noted that strong credit growth and debt-financed public spending continued to boost money supply.

Policymakers raised their inflation forecast, projecting inflation to average 2% this year before accelerating to 2.5% in 2027, while lowering this year's growth forecast to 2.2% from 2.5%.

Looking ahead, the CNB said future policy decisions would depend on incoming data, the economic outlook, inflationary risks, and the effects of monetary policy.



News Stream
Czech National Bank Leaves Key Rate Unchanged
The Czech National Bank left its two-week repo rate unchanged at 3.75% in August 2026, pausing after delivering its first interest rate hike since 2022 at the previous meeting. Although headline inflation remained below target for most of the year, policymakers said underlying inflationary pressures persisted, with core inflation remaining elevated and requiring a sufficiently restrictive monetary policy stance. Meanwhile, economic growth slowed to 2% in the second quarter from 2.2%, while the labor market remained tight. The bank also noted that strong credit growth and debt-financed public spending continued to boost money supply. Policymakers raised their inflation forecast, projecting inflation to average 2% this year before accelerating to 2.5% in 2027, while lowering this year's growth forecast to 2.2% from 2.5%. Looking ahead, the CNB said future policy decisions would depend on incoming data, the economic outlook, inflationary risks, and the effects of monetary policy.
2026-08-06
Czech National Bank First Rate Hike Since 2022
The Czech National Bank raised its two-week repo rate to 3.75% in June 2026, the first rate hike since 2022 and signaling the need for tight monetary policy. The move, despite criticism from the prime minister over its impact on lending, was driven mainly by domestic inflation risks, including rising money supply, first-quarter wage growth at highest levels in three years at 8%, a widening fiscal deficit and the impact of the Iran War. While headline inflation eased to 2.1% in May from 2.5% in April, near the upper limit of the banks target of around 2%, core inflation remained elevated holding near 2.9%. At the same time, economic growth is expected to moderate, with activity projected to expand by 2.2% this quarter, down from 2.7% in the previous period. In addition, higher interest rates are likely to increase the demand for the koruna and, if the central bank signals that further tightening may be required to contain inflation, the currency could strengthen further.
2026-06-18
Czech National Bank Leaves Key Rate Steady at 3.5%
The Czech National Bank kept its two-week repo rate unchanged at 3.5% in April 2026, as widely expected, reinforcing a cautious policy stance. Policymakers said the decision aims to keep headline inflation close to the 2% target over the monetary policy horizon amid elevated uncertainty from the conflict in the Middle East. Preliminary data showed headline inflation accelerated for a second month in April, reaching a six-month high of 2.5% and edging above the central bank’s 2% target. Inflation is expected to remain in the upper half of the central bank’s tolerance band for the rest of this year, due to rising fuel prices, averaging 2.2%, before edging up to 2.4% next year. Core inflation will also stay elevated, moving around 3%. Meanwhile, the GDP is projected to grow 2.5% this year, accelerating to 2.7% next year.
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