Czech central bank holds rate steady at 0.05%

    The Czech central bank held interest rates unchanged, as expected, and the board will release details of its decision later today.
    Last month the Czech National Bank cut its benchmark two-week repo rate to a record low of 0.05 percent and said it would keep rates at this level "over a longer horizon until inflation pressures increase significantly."
    The central bank also maintained its discount rate at 0.05 percent and the Lombard rate at 0.25 percent.
    Inflation in the Czech Republic eased to 2.7 percent in November, the lowest rate this year. The central bank targets inflation of 2 percent.
    The Czech economy is stuck in recession, with Gross Domestic Product shrinking by 0.3 percent in the third quarter from the second, the fifth consecutive quarterly contraction. On an annual basis, the economy shrank by 1.3 percent.
    Last month the central bank revised downwards its growth forecast for this year, expecting the economy to shrink by 0.9 percent this year, down from 1.7 percent growth in 2011. In 2013 the Czech GDP is forecast to rise 0.2 percent and then by 1.9 percent in 2014.

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