Czech National Bank cuts interest rates

The Czech National Bank decided at its last meeting to lower the repo rate from 1,25 to 1 %, i.e. to the level usual in the Eurozone today. The analysts attribute this step to the central bank worries not only of a slow growth of the Czech economy but also of minimum inflation pressures. CNB prime rate has therefore dropped almost to a quarter, from 3.75 to 1 %, clearly in connection with the financial crisis. Yet, the commercial banks follow CNB steps scarcely this year, mortgage interest lie between 5 – 6 %, when these rates rate a different direction from CNB rates.