Czech National Bank refuses further interest rate cut

by   CIJ iDesk I
2020-06-25   09:24

Companies who are waiting for Czech interest rates to fall even further before taking out loans are going to have to move on to their Plan B. A planned meeting of the Czech National Bank's Bank council on Wednesday concluded that a further reduction of rates wasn't appropriate. And at 0.25 percent, there was essentially no room for maneuver since the next stop was essentially 0 percent. CNB governor Jiří Rusnok said after the meeting that rates would likely remain the same for the coming quarter. Czech interest rates had climbed to 2.25 percent before the pandemic but the country's top bankers slashed these rates as the severity of the coming recession caused by a global lockdown became clear. Reacting to the new decision, economists suggest that while a further weakening of the Czech koruna might be useful in theory, the reality of rates being set at 0 percent or lower could have a destabilizing effect on the country's financial system.