Czech National bank reduces interest rate to historic low

The Bank Board of the Czech National Bank voted unanimously on Thursday to decrease the base interest rate to its lowest point ever, with a quarter-point cut to 1.25%. Economists hope commercial banks will react in kind, decreasing interest on loans for businesses; market rates in recent times however have shown little response to the development of the central bank’s rates. The bank’s governor Zdeněk Tůma, indicated that even at this historic low rate there is still leeway, with rock bottom for interest rates always being zero. The central banks of other countries have also reviewed interest rates in recent days, with Hungary bringing its main rate down to 8.5% and Poland setting its own record low at 3.5.