The Czech National Bank cut its base interest rate by 50 basis points to 1.75 percent in an attempt to reduce the impact of an expected economic slowdown. Worldwide stock markets crashed on Monday, while the Czech koruna weakened to less than CZK 27 per euro. The rate reduction by the central bank is all the more remarkable in that it had raised the rate just a month ago. At the time, the Czech koruna looked as if it would strengthen to better than CZK 25 per euro, but the coronavirus has put paid to that idea. The CNB’s governor Jiří Rusnok said it’s clear that a major economic slowdown is coming. “At this moment, we don’t have a complete prognosis, that’s not technically possible,” he said. “It’s very difficult to say whether there will be no growth or negative growth but each day the extraordinary situation continues increases the likelihood of a worse scenario.”
