Czech Republic Interest Rate

The Czech National Bank cut its two-week repo rate to 3.5% in May 2025, after two months of stability at 3.75%, as planned. At the same time, it cut the discount rate by the same amount, to 2.50%, and the Lombard rate to 4.50%. The decision was supported by the fall in inflation to 1.8% in April, the lowest since March 2018, and the appreciation of the krona, which reached its strongest level since June against the euro and since June 2023 against the dollar, opening up room for cuts. The move follows the European Central Bank's trend and seeks to preserve the competitiveness of Czech companies. In addition, US tariffs pose a risk to growth, justifying a more stimulative monetary policy.