As expected, the Czech National Bank cut interest rates again, and the primary rate is at 4,25 per cent after Wednesday's meeting. Central bankers decided to move interest rates down by a quarter of a percentage point, bringing the primary rate down from 4,50 per cent. The Czech National Bank's Bank Board cut interest rates for the seventh time in a row, and nowadays, they are at their lowest value since February 2022.

The CNB is thus continuing the gradual easing of monetary policy it started last December when it cut rates by a quarter percentage point for the first time after a year and a half of stability at seven per cent. Subsequently, it cut rates by half a percentage point four times in a row, and in the last two cases, it decided on a quarter-point cut.

Higher interest rates make it more expensive for businesses to borrow for investment and operations, while households find it more expensive to borrow for housing. On the other hand, lower interest rates encourage borrowing and investment, which usually stimulates economic growth. Lower rates also lead to a depreciation of the Czech koruna, boosting exports abroad. For British companies, the reduction in Czech interest rates provides an opportunity to buy Czech products and services more profitably.

Source: ČTK