The Czech Republic's central bank has announced its seventh consecutive cut to the key interest rate in response to low inflation and a slow economic recovery. The latest cut, as predicted by analysts, reduced the interest rate by a quarter of a percentage point to 4.25%.
This series of rate cuts began on Dec. 21, with subsequent reductions on Feb. 8, March 20, May 2, June 27, and Aug. 1. The Czech economy saw a modest year-on-year growth of 0.6% in the second quarter of 2024, with a 0.3% increase compared to the previous quarter, according to the Czech Statistics Office. The central bank forecasts a growth rate of 1.2% for the full year.
Inflation in August remained steady at 2.2% year-on-year, aligning closely with the bank's target of 2.0%. Meanwhile, the European Central Bank also lowered its key interest rate on Sept. 12 to 3.5% in an effort to support sluggish growth by reducing borrowing costs for businesses and homebuyers.
On Sept. 19, the U.S. Federal Reserve made a significant half-point cut to its benchmark interest rate, marking a notable departure from a period of high rates aimed at controlling inflation. This move is expected to make borrowing more affordable for American consumers.
