Czech Republic Interest Rate

The Czech National Bank kept its two-week repo rate unchanged at 3.5% in December 2025, in line with market expectations, amid softer-than-expected inflation and prospects of further disinflation in 2026. The government recently approved measures to lower electricity bills for households and companies, a move that could push inflation below the 2% target next year while leaving more disposable income that may fuel services inflation. Governor Aleš Michl has avoided signaling a clear medium-term rate path, reiterating that all options remain open. Several board members, however, have indicated that borrowing costs could remain unchanged throughout next year.