As expected, the Czech National Bank raised its basic interest rate by a quarter of a percent to 0.75 percent. The decision was preceded by another jump in value of the Czech crown, which ended at 25.17 per euro. That’s its highest rate for the past five years, but analysts expect a further strengthening of the currency over the course of 2018. Strong economic growth has forced the bank’s hand, in the view of most economists and another increase in interest is widely anticipated over the course of the year.
ING Bank’s chief economist Jakub Seidler told Czech Television that the central bank’s decision was the correct one. “The current rate of interest rates is inappropriately low in the context of the positive economic development of the domestic economy and the more restrictive monetary policy achieved through higher interest rates is desirable.”
