Czech banks aren’t racing to raise interest rates on loans or deposits, in reponse to yesterday’s decision by the Czech National Bank to raise its basic rate to 1 percent. The 25 bps hike was intended to put a brake on rising inflation as well as on a runaway residential prices. Česká spořitelna, in fact, will be temporarily lowering its mortgage loan rates by 0.2 percent though its spokesman admits that depending on the market’s reaction, higher mortgage charges could be implemented during July. Against all expectations (including the CNB’s), the koruna slipped even further, with Patria.cz warning that CZK 26 per euro was around the corner.
