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Czech Central Bank Raises Countercyclical Capital Rate to 1.5% from Oct 2022

CZECHIA
  • CZECH CENTRAL BANK RAISES COUNTERCYCLICAL CAPITAL RATE TO 1.5%
  • CZECH 1.5% COUNTERCYCLICAL RATE EFFECTIVE FROM OCTOBER 2022
  • The second increase in the rate this year is due to the "winding down of the acute phase of the pandemic, improving expectations, all-time high volumes of house-purchase loans accompanied by rapid changes on the property market, and the high level of previously accumulated risks in banks' balance sheets,"
  • It stands prepared to increased the rate further if quick loan growth continues and risks in banks' balance sheets intensify; it will be ready to cut the rate should the economic situation worsen, for instance due to another pandemic wave
  • The bank cut the rate last year as part of steps to support lending to businesses and households during the first wave of the pandemic
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com
MNI London Bureau | +44 020-3983-7894 | murray.nichol@marketnews.com

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