Czech Central Bank Holds Rates Steady After May Reduction

(RTTNews) - The Czech central bank kept interest rates steady on Tuesday, as expected, following a reduction in May.

The Czech National Bank board, led by Governor Ales Michl, left the two-week repo rate unchanged at 3.5 percent. The bank also maintained other interest rates at their current levels.

Thus the discount rate was kept at 2.50 percent and the Lombard rate at 4.50 percent.

In May, interest rates were cut by 25 basis points in a 6-1 vote. The bank had retained the GDP growth forecast for this year at 2.0 percent and the inflation projection at 2.5 percent.

The CNB had assessed that the elevated inflation pressures from the domestic economy remains unchanged due to an upswing in year-on-year services inflation.

Headline consumer price inflation accelerated to 2.4 percent in May from 1.8 percent rise in April, latest official data showed, on the back strong growth in food prices and utility costs.