Czech National Bank slashes interest rates by 75 bps

The Czech National Bank reduced its base interest rate by 0.75 percent, the second time in two weeks it's done so in reaction to fears about the widening economic impact of the coronavirus crisis. But it may not be done yet, according to Czech Fund's chief economy Lukáš Kovanda. "Further reductions of interest rates by the CNB in the relatively near future are likely, though they might not be so enormous," he said. ING's chief economist Jakub Seidler says the rate reductions are more for show than anything else. "It's still the case that just reducing interest rates isn't a very effective medicine for the economic consequences of the current extraordinary measures," he said, hinting that it's up to the government to save the economy with an effective bailout package. Most economists expect the Czech Republic to go into a recession that will last until the remainder of the year.