Czech central bank cuts key interest rate to 4% as inflation stays low

[November 08, 2024]  PRAGUE (AP) — The Czech Republic’s central bank on Thursday cut its key interest rate for the eighth time in a row as inflation remains low and as the economy is making a slow recovery.   

 People stand outside the Czech central bank in Prague, Czech Republic, Thursday, Nov. 2, 2023. (AP Photo/Petr David Josek, File)

The cut, which had been predicted by analysts, brought the interest rate down by a quarter of a percentage point to 4%.

The bank started to trim borrowing costs by a quarter-point on Dec. 21, the first cut since June 22, 2022. Further cuts of half a percentage point followed on Feb. 8, March 20, May 2, and June 27. Cuts of a quarter of a percentage point came on Aug. 1 and Sept. 25.

The size of the Czech economy was 1.3% up year-on-year in the third quarter of 2024, an increase of 0.3% compared with the previous three months, according to the national statistics office.

Inflation was at 2.6% year-on-year in September, and down by 0.4%, compared with August. The bank’s target is 2%.

The European Central Bank, which sets interest rates for the 20 countries that use the euro currency, cut borrowing costs from 3.5% to 3.25% on Oct 17, its third reduction of its benchmark rate since June.

The U.S. Federal Reservewas set on Thursday to reduce its key interest rate for a second straight time, responding to a steady slowdown of the inflationary pressures that exasperated many Americans and contributed to Donald Trump’s presidential election victory.

All contents © copyright 2024 Associated Press. All rights reserved