2W repo rate and Lombard rate reduction by 25 basis points: 2W repo rate 1.00%, Lombard rate 2.00%. Discount rate unchanged: 0.25%.

The CNB Bank Board decided at its meeting today to lower the two-week repo rate by 25 basis points to 1.00%. The Lombard rate was also lowered by 25 basis points to 2.00%. The discount rate remains unchanged: 0.25%. The new interest rate levels come into effect on 17th December 2009.

The history of settings of main instruments of monetary policy and Bank Board minutes available at
http://www.cnb.cz/en/monetary_policy/instruments/index.html#mpi
http://www.cnb.cz/en/monetary_policy/bank_board_minutes/index.html

Discount rate: A monetary policy rate which as a rule represents the floor for short-term money market interest rates. The CNB applies it to the excess liquidity which banks deposit with the CNB overnight under the deposit facility.

Lombard rate: A monetary policy interest rate which provides a ceiling for short-term interest rates on the money market. The CNB applies it to the liquidity which it provides to banks overnight under the lending facility.

Repo rate: The CNB’s key monetary policy rate, paid on commercial banks’ excess liquidity as withdrawn by the CNB in two-week repo tenders.

Marek Petruš, CNB spokesman