CNB leaves rates alone but economy's fall continues

by   CIJ Linguistics
2020-08-07   10:46
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The banking council of the Czech National Bank decided in a unanimous vote to leave the basic interest rates at 0.25 percent. CNB governor Jiri Runok said it was unlikely that the rates would change before the end of the year. But he also warned the Czech economy would be weaker than expected this year and would need two years to recover from the pandemic. The CNB now expects GDP to fall 8.2 percent in 2020 and while growth of 3.5 percent should be achieved in 2021, it will take until the end of 2022 for the economy to reach its pre-pandemic levels. National banks are notorious for surprising markets, but most analysts believe Rusnok's assurances that rates will stay where they are for the time being. "I don't think anything extraordinary would happen that would require our reaction," said Rusnok. "We're not facing any acute need for change of our exchange rate policy."