By: The Quinnipiac University Economics Research Team, Jack Hangen
The Czech National bank has chosen to raise interest rates by more than the standard 0.25 percent for the fourth time consecutively. The latest hike will bring the rate from 3.73 percent to 4.5 percent, which will make the interest rate the highest it has been in 20 years. These increases will make getting loans for investments and mortgages drastically more expensive which is intended to slow the economy and tame inflation.
The inflation rate reached 6.6 percent in December of 2022, which prompted the latest rate increase. In addition, not only was December inflation high, it was a full percentage point above what had been predicted for the month, placing unexpected pressure on the local monetary authorities to act. While economists expected the move, some still criticized it because the European Central Bank still has kept its rate at 0%. The chief economist of the Czech Banking Association does not expect interest rates in the community to continue increasing in such large steps and says that he does not expect the interest rate to break 5 percent during the year.
This article is based upon: https://english.radio.cz/czech-national-bank-raises-interest-rate-20-year-high-8741115