The current value of the basic interest rate of seven percent is the highest since May 1999. The interest rates on bank deposits and loans to households and businesses are derived from the rates.
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For the ninth time in a row, the CNB Board decided to increase the interest rate. It started raising in June last year, and finally gradually increased the rate five times. This is the fourth increase this year, and at the same time the most significant.
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The Bank Board also decided to increase the discount rate to the same extent to six percent and the Lombard rate to eight percent.
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In addition to Rusnok, Vice-Governor Tomáš Nidetzký and Board Member Vojtěch Benda also sat on the Bank Board for the last time on Wednesday. From July, Aleš Michl will become the new head of the CNB, and Eva Zamrazilová, who will become Vice Governor, Karina Kubelková and Jan Frait, will sit on the board.
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Michl has been opposed to raising rates so far, so some analysts expect it to be their last sharp rise. “At the next meeting, the board will act in a new composition and, according to current estimates, should take a more reserved position on raising rates,” said Ebury’s sales director Tomáš Kudla.
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At the same time, he reminded that the CNB has been intervening since 12 May against the weakening of the Czech koruna, which has not exceeded 24.75 per euro since then. “With this step, it also helps us in part to curb inflation, which already reached 16 percent in May. Thanks to the stronger crown, goods and materials imported in foreign currency are cheaper, “he explained.
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