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2025.12.1814:45:53UTC+00Czech Central Bank Holds Rates

In December 2025, the Czech National Bank decided to maintain its two-week repo rate at 3.5%, aligning with market forecasts. This decision comes amid unexpectedly mild inflation figures and expectations of further disinflation heading into 2026. Recently, the government implemented measures to reduce electricity costs for both households and businesses, which could potentially lower inflation to below the 2% target in the upcoming year. This reduction might also increase disposable income, potentially driving up inflation in the services sector. Governor Aleš Michl has refrained from providing a definitive medium-term interest rate trajectory, emphasizing that all options remain under consideration. However, some board members have suggested that borrowing costs might stay unchanged throughout the next year.

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