5th February 2016

CNB: Interest rates at technical zero, currency interventions commitment unchanged, GDP growth in 2016 slower than in 2015

At its on 4 February, the Bank Board of the Czech National Bank decided unanimously to keep interest rates unchanged at technical zero. The Bank Board decided to continue using the exchange rate as an additional instrument for easing the monetary conditions and confirmed the CNB’s commitment to intervene on the foreign exchange market if needed to weaken the koruna so that the exchange rate of the koruna is kept close to CZK 27 to the euro. In line with this, the Czech National Bank still stands ready to intervene automatically, i.e. without the need for an additional decision of the Bank Board, and without any time or volume limits. The asymmetric nature of this exchange rate commitment, i.e. the willingness only to intervene against appreciation of the koruna below the announced level, is unchanged.

Also,  according to a CNB estimate, GDP thus increased by 4.7% in 2015 as a whole. According to the forecast, the growth of the Czech economy will slow markedly this year because of a temporary decline in gross capital formation due mainly to a drop in government investment financed from EU funds. However, the economy will continue to be supported by easy domestic monetary conditions via the weakened koruna and exceptionally low interest rates. A further decrease in the oil price and rising external demand are also fostering economic growth. Economic growth will pick up slightly again to 3% in 2017...Read full article in English and Czech.

Read also CNB's recently published inflation report in English and Czech.



Members of the American Chamber of Commerce in the Czech Republic