The Czech central bank on Thursday decided to keep its benchmark interest rate unchanged at a record low, as economic outlook remained murky amid the deepening Eurozone debt crisis and a weakening koruna. The decision was in line with economists' expectations.
The Czech National Bank kept the two-week repo rate at 0.75 percent unchanged. The central bank has held the rate steady since May 2010. The repo rate is the rate paid on commercial banks' excess liquidity as withdrawn by the CNB in two-week repo tenders.
The central bank also maintained the discount rate at 0.25 percent and the Lombard rate at 1.75 percent.
Czech annual inflation slowed slightly to 2.4 percent in December from 2.5 percent in November, which was the highest rate in around 3 year. Inflation remained above the central bank's 2-percent target for a third month. In the year 2011, the average inflation rate reached 1.9 percent.
The Czech economy contracted 0.1 percent in the third quarter, marking the first sequential contraction since 2009. Year-on-year, the GDP increased 1.2 percent.
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