The Czech Republic’s central bank reduced its key interest rate for the sixth consecutive time due to lower inflation and slower-than-expected economic recovery. The rate cut, as forecasted by analysts, decreased the interest rate by a quarter of a percentage point to 4.50%. This marked the sixth reduction following previous cuts on Dec. 21, Feb. 8, March 20, May 2, and June 27.
Preliminary data from the Statistics Office indicated that the Czech economy grew by 0.4% year-on-year in the second quarter of 2024, with a 0.3% increase compared to the previous three months. Inflation dropped to the central bank’s target of 2.0% year-on-year in June, down from 2.6% in May.
Central banks worldwide are considering lowering borrowing costs as they assess the impact of inflation. The European Central Bank maintained its key interest rate benchmark at 3.75% on July 18. Federal Reserve Chair Jerome Powell hinted at a potential rate cut, noting progress in curbing inflation and stabilizing the job market. Despite this, the Fed retained its key interest rate at 5.3%, with a possibility of a rate cut in September.
