CNB Governor doesn’t rule out further rise in interest rates

The head of the Czech National Bank (CNB), Jiří Rusnok, says he is not ruling out a further rise in interest rates at the next meeting of the bank board which is set to take place in May. Speaking Wednesday, on the occasion of the opening of a new public information centre, Mr Rusnok also ruled out any lowering of the bank’s interest rates this year.

The last time the Czech National Bank raised its interest rates was in the beginning of April, when the two-week repo rate rose by 0.50 percentage point to 5 percent, the discount rate rose by the same amount to 4 percent and the Lombard rate was set to 6 percent. According to the CNB, the current base interest rate now lies at 5 percent, which is the highest it has been since 2001.

The year-on-year inflation rate lay at 12.7 percent in March. It has been rising sharply ever since the second half of 2021 and is currently one of the highest among all EU member states. Mr Rusnok said that he expects inflation will culminate at around 13 to 14 percent in the next months, but he expects that it will begin to fall towards the end of the year.