International Property News

Czech central bank cuts key rate to 3.5 percent

7th Aug 2008

The Czech Republic's central bank said Thursday it had cut its key interest rate by one-quarter percentage point to 3.5 percent.

The move comes amid concerns that the recent rise of the Czech koruna against the euro is harming exports and the economy.

The bank said later Thursday it has lowered its growth forecast for the country's economy this year to 4.1 percent from 4.7 percent, and also for next year from 4.0 to 3.6 percent.

It said inflation was predicted to be under its target of 3 percent in 2009. Inflation was at 6.7 percent in June.

The Czech benchmark lending rate is the lowest in the European Union.

The European Central Bank has its benchmark figure for the eurozone at 4.25 percent. The Czech Republic has no target date for adopting the euro.

The Czech bank also cut its discount rate to 2.5 percent and the Lombard rate to 4.5 percent, both by a quarter of a percentage point.

The changes will become effective Friday.

Source: Herald Tribune