Czech National Bank holds key monetary policy rate steady at 0.05%

By Toni Weeks

San Luis Obispo, Calif., Feb. 5 – The board of Czech National Bank said it chose to maintain interest rates at their current levels at its meeting on Thursday.

The two-week repo rate remains at 0.05%, according to a bank notice. In addition, the discount rate stays at 0.05%, and the Lombard rate is unchanged at 0.25%.

The board also said it has decided to continue using the exchange rate as an additional instrument for easing the monetary conditions and confirmed the bank’s commitment to intervene on the foreign exchange market, if needed, to weaken the koruna so that the exchange rate of the koruna against the euro is kept close to CZK 27 per euro.

The bank board reiterated that it regards the commitment as one-sided, meaning that Czech National Bank will prevent excessive appreciation of the koruna below CZK 27 by selling koruna and buying foreign currency.

On the weaker side of the CZK 27 level, the bank said it is allowing the koruna exchange rate to float based on supply and demand in the foreign exchange market.

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