Polish and Czech Central Bank Rate Cuts – Currency Thoughts
Polish and Czech Central Bank Rate Cuts
May 7, 2025
Officials at the Czech National Bank cut their two-week repo rate by 25 basis points to 3.50%, its lowest level since December 2021 and down from a cycle peak of 7.0% maintained for a full year prior to an initial cut in December 2023. One of the seven voters behind this decision preferred to leave the rate unchanged. The Board “confirmed its determination to continue its monetary policy in order to maintain inflation near the 2% target in the long term. At present, this still requires relatively tight monetary policy.” Future decisions will be data dependent. The released statement acknowledges in-target Czech inflation since the start of last year and a tightening of global financial conditions.
The National Bank of Poland’s reference rate has been reduced by a half percentage point to 5.25%, its lowest level since June 2022. Today’s decision was the first rate change since back-to-back cuts totaling 100 basis points in September and October of 2023. According to a statement from the Monetary Policy Council, “economic activity growth in 2025 Q1 was probably lower than expected and somewhat lower than the 2024 Q4 figure.” April inflation of 4.2% last month was down from March’s level. Other developments justifying today’s rate cut include lower projected inflation and decreasing wage growth.
Copyright 2025, Larry Greenberg. All rights reserved. No secondary distribution without express permission.
Tags: Czech National Bank, National Bank of Poland
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