As expected, the banking council of the Czech National Bank raised its basic interest rate at its meeting on Wednesday by 25 bps to 1 percent. Rising wages and the weakening national currency were the primary reasons behind the move, as was the fact that inflation has exceeded the bank’s 2 percent target. The last time the CNB raised its rates was in February, however at that time it thought no more rate hikes would be needed before the end of the year. With current developments of the economy, another ratke hike is not being ruled out by economic analysts for the fourth quarter of this year.
