Czech central bank cuts its key interest rate to 4.25%

PRAGUE (AP) — The Czech Republic’s central bank on Wednesday cut its key interest rate for the seventh time in a row as inflation remains low and amid the economy’s slow recovery.

The cut, which had been predicted by analysts, brought the interest rate down by a quarter of a percentage point to 4.25%.

The bank started to trim borrowing costs by a quarter-point on Dec. 21, the first cut since June 22, 2022. Further cuts of half a percentage point each time followed on Feb. 8, March 20, May 2 and June 27.

Another cut by a quarter of a percentage point came on Aug 1.

The size of the Czech economy was up by 0.6% up year-on-year in the second quarter of 2024, and increased by 0.3% compared with the previous three months, according to the Czech Statistics Office.

The bank predicts growth of 1.2% for 2024.

Inflation was at 2.2% year-on-year in August, the same as the previous month, close to the bank’s target of 2.0%.

The European Central Bank cut its key interest rate on Sept. 12 from 3.75% to 3.5% for the second time to prop up tepid growth with lower borrowing costs for companies and home buyers.

The U.S. Federal Reserve cut its benchmark interest rate on Sept. 19 by an unusually large half-point, a dramatic shift after more than two years of high rates that helped tame inflation. but also made borrowing painfully expensive for American consumers.

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