CNB cuts interest rates to record low

The CNB Bank Board decided at its meeting today to lower the two-week repo rate by 20 basis points to 0,05%. The Lombard rate was lowered by 50 basis points to 0.25% and the discount rate was lowered by 5 basis points to 0.05%. The new interest rate levels come into effect on 2nd November 2012.

The CNB last eased monetary policy on 27th September 2012, when it lowered the repo rate by 25 basis points to 0.25%.

The history of settings of main instruments of monetary policy and Bank Board minutes available at:
https://www.cnb.cz/en/monetary-policy/instruments/#mpi
https://www.cnb.cz/en/monetary-policy/bank-board-decisions/

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Repo rate: The CNB’s key monetary policy rate, paid on commercial banks’ excess liquidity as withdrawn by the CNB in two-week repo tenders.

Tomáš Zimmermann, CNB Press Officer