CNB raises rates, koruna will appreciate

Published: 05.02.2018 Related countries:  Israel Israel

In 2017 Czech currency appreciated almost 7 % on the euro and further 3% increase is expected in 2018.

Czech central bank has raised the key interest rate to 0.75% from 0.5%. Czech National Bank (CNB) presumes that rates will be raised once again in 2018 and mortgages and consumer loans may thus become more expensive. Deposits in banks will not be raised, though, and analysts do not anticipate any major raising of housing loan rates. On Thursday February 1, 2018, Czech koruna appreciated to CZK 25.17/EUR, i.e. the best closing value in more than five years. According to CNB’s prediction, koruna will appreciate almost 3% within a year. The euro is thus expected to cost ca. CZK 24.60 at the beginning of 2019. The central bank has published its outlook for Czech currency’s development for the first time since the koruna’s unpegging in April 2017. Until then, the koruna appreciated almost 7% on the euro.

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