{"id":14259,"date":"2025-06-27T08:11:21","date_gmt":"2025-06-27T08:11:21","guid":{"rendered":"https:\/\/axevera.com\/?p=14259"},"modified":"2025-06-27T08:11:23","modified_gmt":"2025-06-27T08:11:23","slug":"czech-national-bank-pauses-base-rate-stays-at-3-5","status":"publish","type":"post","link":"https:\/\/axevera.com\/en\/2025\/06\/27\/czech-national-bank-pauses-base-rate-stays-at-3-5\/","title":{"rendered":"Czech National Bank Pauses: Base Rate Stays at 3.5%"},"content":{"rendered":"\n<p><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Introduction<\/h2>\n\n\n\n<p>On June 26, 2025, the <strong>Czech National Bank (\u010cNB)<\/strong> announced it would keep its <strong>base interest rate unchanged at 3.5%<\/strong>, as widely anticipated by analysts. This marks a pause in the monetary easing cycle that began in late 2023, justified by persistent inflationary pressures, particularly in the services sector. The decision reflects the central bank\u2019s cautious approach amid ongoing global economic uncertainty.<\/p>\n\n\n<div class=\"wp-block-image\">\n<figure class=\"aligncenter size-large is-resized\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"576\" src=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39-1024x576.jpg\" alt=\"\" class=\"wp-image-14261\" style=\"width:590px;height:auto\" srcset=\"https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39-1024x576.jpg 1024w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39-300x169.jpg 300w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39-768x432.jpg 768w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39-1536x864.jpg 1536w, https:\/\/axevera.com\/wp-content\/uploads\/2025\/06\/Sfondo-immagini-sito-web-39.jpg 1920w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure><\/div>\n\n\n<h2 class=\"wp-block-heading\">A Pause, Not an End<\/h2>\n\n\n\n<p>According to <strong>Petr Dufek<\/strong>, Chief Economist at Creditas Bank, this is a temporary pause rather than the end of the rate-cutting cycle. While inflation has come close to the 2% target, reaching <strong>2.4% in May<\/strong>, the underlying trends warrant caution, especially with prices in services and the real estate market still on the rise.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Monetary Policy in Global Context<\/h2>\n\n\n\n<p>The \u010cNB\u2019s base rate remains <strong>150 basis points higher<\/strong> than that of the <strong>European Central Bank<\/strong>, but still lower than those set by other regional central banks, such as Hungary and Poland, or the <strong>U.S. Federal Reserve<\/strong>. This positioning highlights the \u010cNB&#8217;s balancing act between keeping inflation under control and supporting economic growth.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Inflation Controlled, But Not Everywhere<\/h2>\n\n\n\n<p>Governor <strong>Ale\u0161 Michl<\/strong> confirmed that <strong>there is no room for immediate rate cuts<\/strong>. The current tight monetary policy aims to ensure that Czech inflation remains near the 2% target over the long term. However, the risks of rising inflation have intensified due to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>a possible revival in real estate lending,<\/li>\n\n\n\n<li>rapid wage growth,<\/li>\n\n\n\n<li>increasing public spending.<\/li>\n<\/ul>\n\n\n\n<p>Service and food prices remain the most significant threats.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">What\u2019s Next? Possible Rate Cut in August<\/h2>\n\n\n\n<p>A rate cut could still happen <strong>as early as August<\/strong>, depending on global conditions. Key factors to watch include:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the outcome of <strong>EU\u2013US trade talks<\/strong>,<\/li>\n\n\n\n<li><strong>commodity market trends<\/strong>,<\/li>\n\n\n\n<li><strong>preliminary crop forecasts<\/strong>, which will influence food price expectations.<\/li>\n<\/ul>\n\n\n\n<p>On the other hand, a slowdown in the global economy, exacerbated by conflicts in Ukraine, the Middle East, or escalating trade wars, could push inflation downward, reducing the need for rate cuts.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Lombard and Discount Rates Also Unchanged<\/h2>\n\n\n\n<p>In addition to the base rate, the \u010cNB left:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>the <strong>Lombard rate at 4.5%<\/strong>, and<\/li>\n\n\n\n<li>the <strong>discount rate at 2.5%<\/strong>.<\/li>\n<\/ul>\n\n\n\n<p>These rates govern borrowing and certain penalty-related charges. Their stability further underscores the central bank\u2019s wait-and-see strategy.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Conclusion<\/h2>\n\n\n\n<p>The <strong>Czech National Bank\u2019s<\/strong> decision to <strong>hold its base rate at 3.5%<\/strong> signals a strategic pause in a still-sensitive economic climate. While headline inflation appears under control, deeper structural pressures, particularly in services and housing-remain unresolved. The coming weeks will be key to assessing whether the \u010cNB can resume rate cuts or if continued restraint will be needed.<\/p>\n\n\n\n<p>AI \u2013 generated image.<\/p>\n\n\n\n<p>Sources: <a href=\"https:\/\/www.novinky.cz\/clanek\/ekonomika-zakladni-sazba-zustava-na-35-procenta-40527524\">https:\/\/www.novinky.cz\/clanek\/ekonomika-zakladni-sazba-zustava-na-35-procenta-40527524<\/a> <\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Czech National Bank decided to keep its base rate steady at 3.5%, pausing the current monetary easing cycle. While inflation has moderated, price pressures in services persist.<\/p>\n","protected":false},"author":5,"featured_media":14267,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[525],"tags":[],"yst_prominent_words":[],"class_list":{"0":"post-14259","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-en"},"_links":{"self":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/14259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/comments?post=14259"}],"version-history":[{"count":2,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/14259\/revisions"}],"predecessor-version":[{"id":14265,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/posts\/14259\/revisions\/14265"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media\/14267"}],"wp:attachment":[{"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/media?parent=14259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/categories?post=14259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/tags?post=14259"},{"taxonomy":"yst_prominent_words","embeddable":true,"href":"https:\/\/axevera.com\/en\/wp-json\/wp\/v2\/yst_prominent_words?post=14259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}