|Adjustments||Not Seasonally Adjusted|
|Data||25 Jun 2019||2|
|24 Jun 2019||2|
|Lending Rate||25 Jun 2019||2||2||Percent, NSA||Daily|
|Money Market Rate||25 Jun 2019||2||2||% P.A., NSA||Business Daily|
|Stock Market Index||24 Jun 2019||1,056||1,053||Index, NSA||Business Daily|
|Average Long-term Government Bond||May 2019||1.86||1.82||% p.a., NSA||Monthly|
|Treasury Bills (over 31 days)||Nov 2018||0.5||0.5||% p.a., NSA||Monthly|
According to the Czech Constitution and the Act on the Czech National Bank, the CNB’s primary objective is to maintain price stability. Without prejudice to its primary objective, the CNB also supports the general economic policies of the Government. The CNB achieves its primary objective – price stability – by making changes to key interest rates. The interest rate decisions of the CNB Bank Board are based on the current macroeconomic forecast and an assessment of the risks to its fulfilment. On the Czech Republic’s entry into the euro area, the CNB will cede independent monetary policy to the European Central Bank.
The main monetary policy instrument takes the form of repo tenders. The CNB accepts surplus liquidity from banks and in return transfers eligible securities to them as collateral. The two parties agree to reverse the transaction at a future point in time, when the CNB as borrower repays the principal of the loan plus interest and the creditor bank returns the collateral to the CNB. The basic duration of these operations is 14 days; the two-week repo rate (2W repo rate) is therefore considered to be of key importance in terms of monetary policy. Repos with shorter maturities are executed from time to time depending on the forecasts of banking sector liquidity. Owing to the systemic liquidity surplus in the Czech banking sector, 2W repo tenders are currently used exclusively for absorbing liquidity.
Other key instruments are the deposit facility - discount rates, marginal lending facitily - Lombard rate, reserve requirement - banks, and reserve requirement - building societies.