CNB cut its key interest rate to 0.25%
27.09.2012 / 21:30
The Czech National Bank decided at its meeting on September 27, 2012 to lower the two-week repo rate by 25 basis points to 0.25%. Repo rate is CNB's key monetary policy rate paid on commercial banks' excess liquidity as withdrawn by the CNB in two-week repo tenders.
The Lombard rate was lowered by 75 bases points to 0.75%. It is used for commercial banks when they borrow money from the central bank against securities as collateral.
The discount rate was lowered by 15 basis points to 0.10%. It applies to the excess liquidity which banks deposit with the CNB overnight under the deposit facility.
The new interest rates come into effect on October 1, 2012. The CNB last eased monetary policy on June 28, 2012, when it lowered the repo rate by 25 bases points to 0.50%.
The Czech Republic thus has ones of the lowest rates. The European Central Bank's (ECB) benchmark rate valid for all euro-zone countries stands at 0.75%. The US Fed has rates set in the band of zero to 0.25%. The Bank of England has the benchmark rate at 0.5%.
On the orher hand, Poland has its rate at 4.75% and Hungary even at 6.50%.