Czechia - Lending Rate

Czechia: Lending Rate

Unit Percent, NSA
Adjustments Not Seasonally Adjusted
Data 24 Mar 2023 7
23 Mar 2023 7

Series Information

Source Czech National Bank (CNB)
Release Monetary Policy
Frequency Business Daily
Start Date 12/7/1995
End Date 3/24/2023

Czechia: Markets

Reference Last Previous Units Frequency
Lending Rate 24 Mar 2023 7 7 Percent, NSA Daily
Money Market Rate 23 Mar 2023 6.37 6.74 % P.A., NSA Business Daily
Stock Market Index 23 Mar 2023 1,325 1,328 Index, NSA Business Daily
Average Long-term Government Bond Feb 2023 4.61 4.47 % p.a., NSA Monthly
Treasury Bills (over 31 days) Nov 2018 0.5 0.5 % p.a., NSA Monthly

Release Information

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.

The Bank Board meets to discuss monetary issues eight times a year and, in exceptional cases, it may also take decisions on monetary issues at extraordinary meetings. The monetary policy meeting is followed by a press conference. At the press conference, the CNB releases a brief digest of the information which the Bank Board based its discussion on, a list of the risks pertaining to the current forecast according to the Bank Board members, and the Bank Board’s decisions regarding the interest rate settings, including the ratio of the votes cast. The presentation given at the press conference is made available immediately after the press conference, usually at around 4 p.m. Since May 2007, audio recordings from the press conferences have been made available on the CNB website about one hour after the press conference. The minutes of the meeting, reflecting the Bank Board members’ discussion, are usually published 8 days later. Detailed transcripts of the monetary Bank Board meetings and the inputs for the Bank Board’s decisions on monetary issues (the Situation Report on Economic and Monetary Developments and the Monetary Policy Recommendation) are published six years later.

Revisions not applicable.

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