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CNB slashed its key interest rate to a record 0.05%

(This article expired 03.11.2013.)

The Czech National Bank Board slashed its key two- week repo rate from 0.25% to 0.05% on November 1, 2012. The CNB cut rates previously on September 27, 2012.

Czech 5-year bond yields tumbled the most ever and the koruna slid to its weakest in almost three months after the central bank unexpectedly cut interest rates.

The CNB seeks to prevent inflation from slowing to below the 2 percent target as household and government spending cuts helped fuel a second recession in three years. Gross domestic product may shrink 1% this year and grow 0.7% in 2013.

Governor Singer said that the steps to weaken the koruna would be the next move in case further monetary easing is needed.