How do client rates on koruna loans change in response to changes in market rates?

The CNB’s key monetary policy interest rates and their expected future levels affect market rates, which in turn pass through to client lending and deposit rates. This analysis describes the changes in the completeness and speed of a part of the monetary transmission mechanism, specifically the pass-through of market rates to client rates on koruna-denominated loans. The results indicate that in recent years, the pass-through has been complete, taking place entirely within one month, in the case of firms and almost complete, but with a time lag, in the case of mortgages. Published as part of the Summer 2024 Monetary Policy Report (or MPR). Authors: Eva Hromádková, Ivana Kubicová, Branislav Saxa