Czech central bank raises key rate again to tackle inflation

Jun 22, 2022, 6:00 AM | Updated: 7:56 am

PRAGUE (AP) — The Czech Republic’s central bank once again raised its key interest rate significantly Wednesday as it tried to combat soaring inflation.

The hike of a percentage point and a quarter brought the interest rate to 7%, the highest level since early 1999. It was the ninth straight increase since June 2021. The bank last raised the rate, by three-quarters of a point, on May 5.

Wednesday’s increase was not unexpected. The Czech National Bank considers high consumer prices to be a major threat and had indicated it would raise the rate again.

It was the last meeting of the bank’s board on monetary policy under outgoing governor Jiri Rusnok.

“Restoring price stability soon is now the Czech National Bank’s absolute priority and is a necessary condition for the long-term prosperity of the Czech economy,” Rusnok said Wednesday.

On July 1, he will be replaced by Ales Michl, a member of the bank’s board since 2018 who opposed previous rate hikes.

The announcement of Michl’s appointment by Czech President Milos Zeman on May 11 resulted in a weakening of the Czech currency, the crown, prompting the central bank to intervene.

Fed by high energy and food prices but also factors such as a low unemployment rate, inflation in the Czech Republic soared to 16% in May, far above the bank’s 2% target and the highest level since December 1993.

Inflation is soaring worldwide: The U.S. reported an annual rate of 8.6% in May, and the 19 countries that use the euro recorded 8.1% inflation the same month. Britain announced Wednesday that its inflation rate hit a new 40-year high of 9.1% in the 12 months to May.

Major central banks have reacted accordingly.

The European Central Bank has announced it will raise interest rates in July for the first time in 11 years and add another hike in September, catching up with other central banks worldwide to squelch soaring inflation.

Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


Associated Press

9 injured in shooting near beach in Hollywood, Florida

Police are responding to a shooting near the beach broadwalk in Hollywood, Florida.

1 day ago

Crew members assemble the main stage ahead of the 2023 Scripps Nations Spelling Bee on Sunday, May ...

Associated Press

Exclusive secrets of the National Spelling Bee: Picking the words to identify a champion

As the final pre-competition meeting of the Scripps National Spelling Bee's word selection panel stretches into its seventh hour, the pronouncers no longer seem to care.

1 day ago

FILE - Gabby Petito's mother Nichole Schmidt, wipes a tear from her face during a news conference o...

Associated Press

Mother of man who killed Gabby Petito said in letter she would help son ‘dispose of a body’

The mother of the man who killed Gabby Petito told her son in an undated letter that she would “dispose of a body” if needed because she loved him so much, according to copies of the note shared publicly for the first time this week by attorneys for Petito's parents.

4 days ago

A member of the 3rd U.S. Infantry Regiment, also known as The Old Guard, places flags in front of e...

Associated Press

5 things to know about Memorial Day including its controversies

Memorial Day is supposed to be about mourning the nation’s fallen service members, but it’s come to anchor the unofficial start of summer and a long weekend of discounts on anything from mattresses to lawn mowers.

4 days ago

FILE - This artist sketch depicts the trial of Oath Keepers leader Stewart Rhodes, left, as he test...

Associated Press

Officers describe chaos, fear on Jan. 6 as judge weighs prison time for Oath Keepers’ Rhodes

Police officers who defended the U.S. Capitol on Jan. 6, 2021, and public servants who fled the mob's attack told a judge on Wednesday that they are still haunted by what they endured, as the judge prepares to hand down sentences in a landmark Capitol riot case.

5 days ago

Pride month merchandise is displayed at the front of a Target store in Hackensack, N.J., Wednesday,...

Associated Press

Target on the defensive after removing LGBTQ+-themed products

Target once distinguished itself as being boldly supportive of the LGBTQ+ community.

6 days ago

Sponsored Articles



Here are the biggest tips to keep your AC bill low this summer

PHOENIX — In Arizona during the summer, having a working air conditioning unit is not just a pleasure, but a necessity. No one wants to walk from their sweltering car just to continue to be hot in their home. As the triple digits hit around the Valley and are here to stay, your AC bill […]

(Photo: OCD & Anxiety Treatment Center)...

OCD & Anxiety Treatment Center

Here’s what you need to know about OCD and where to find help

It's fair to say that most people know what obsessive-compulsive spectrum disorders generally are, but there's a lot more information than meets the eye about a mental health diagnosis that affects about one in every 100 adults in the United States.

(Photo by Michael Matthey/picture alliance via Getty Images)...

Cox Communications

Valley Boys & Girls Club uses esports to help kids make healthy choices

KTAR’s Community Spotlight focuses on the Boys & Girls Club of the Valley and the work to incorporate esports into children's lives.

Czech central bank raises key rate again to tackle inflation