PRAGUE (Reuters) – The Czech National Bank, as expected, left its key interest rate at 0.25% on Wednesday. The regulator has taken a break amid a surge in new cases of COVID-19 in the country that threatens to stall economic recovery.
The export-oriented economy of the Czech Republic is recovering from a record fall in the second quarter caused by the pandemic. With the outbreak of a new COVID-19 outbreak in September, which has overtaken the spring in terms of the number of cases, the government is trying to avoid a lockdown that could harm businesses, but has imposed restrictions on restaurants and bars.
Analysts expected that after the meeting of the Central Bank of the Czech Republic on Wednesday, rates will remain unchanged, and predicted a stable policy of the regulator throughout this year and 2021, although uncertainty due to the pandemic remains.
The two-week repo rate is at 0.25% after dropping 200 basis points in the spring.
Several officials have signaled that there is no need to further ease monetary policy at this time. Inflation remains above 3%, which is outside the acceptable target range of the Central Bank, the upper limit of which is around 2%.
Markets will follow the comments of the head of the bank Jiri Rusnok at the press conference, which starts at 16:45 Moscow time.
(Robert Müller and Jan Lopatka, translated by Elizaveta Zhuravleva. Editor Anna Kozlova)