The Czech National Bank reduced its two-week repo rate by 50 basis points to 5.75% on 20 March 2024, continuing its easing cycle. Consumer price inflation had declined to the CNB's 2% target.
The 50-basis-point reduction follows a series of cuts the CNB has delivered since December 2023.
INFLATION BACKGROUND
The central bank cited the decline in inflation as the primary driver of the latest cut. Price growth in the Czech Republic had been running above target through much of 2022 and 2023, after the CNB had raised rates in 2021 and 2022.
VOTE AND NEXT STEPS
The CNB has said that future decisions will be data-dependent.
The bank board said it would continue to approach further rate cuts with caution. Five board members voted for the 50-basis-point cut and two for a larger 75-basis-point reduction.