Czech National Bank likely to hike its interest rates three times in 2019

Czech National Bank likely to hike its interest rates three times in 2019
Czech National Bank (CNB) is likely to raise its interest rates three times this year, due to weaker koruna
By bne IntelliNews March 22, 2019

Czech National Bank (CNB) is likely to raise its interest rates three times this year, due to weaker koruna, said the bank board member Vojtech Benda for daily Lidove Noviny on March 18.

“If the crown were to remain near the current levels, it is likely to happen that there could be three rate hikes by the CNB this year,” Benda said.

Earlier this month, the board member Tomas Holub said the bank would hike its interest rates once or twice this year. He said that there is a possibility, due to disorderly Brexit, that the bank board might consider tightening its monetary policy. “Overall, data from the domestic economy seems to me to be slightly supporting a further rise of interest rates. I see zero to two [hikes this year]. I don't rule out the zero as such, but I don't see it much likely. We are still in the process of normalising monetary policy,” he added.

At its February meeting, the CNB board members decided not to hike interest rates. The interest rate remained at 1.75%, the discount rate amounted to 0.75% and the Lombard rate was at 2.75%. It also decided to leave the countercyclical capital buffer rate on hold at 1.75%.

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