The Czech National Bank made news again by doing nothing yesterday. Beginning in June 2021 (when interest rates were 0.25%), it raised the interest rate each time the bank’s council met to discuss the issue. The 2-week repo rate reached 7% after the council’s June meeting, but there have been no increases since then. “A majority of the bank council members see the current base interest rate as entirely adequate,” said the CNB’s vice-governor Eva Zamrazilová. That doesn’t mean they’re fine with the current rate of inflation, but rather the fact that it’s not rising at the moment. In fact, year-on-year inflation fell from 17.5% to 17.2%. Not great, in other words, but it offers hope that predictions of +20% inflation this fall might be avoided. Nearly half of all Czechs are cutting down costs “drastically” according to a recent survey. Mortgage rates have risen to 5.76%, slashing demand for such loans by 78% in June.
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