The European Central Bank (ECB) raised interest rates by 25 basis points to 2.5 percent on Thursday. Inflation in the eurozone reached 3.3 percent in August, driven primarily by energy prices. The Prague Stock Exchange rebounded after two days of declines, with the PX index rising by 0.58 percent. The Czech National Bank (CNB) left the countercyclical capital reserve rate unchanged, and board member Zamrazilová recommended waiting before raising key interest rates further. Domestic banks issued a large package of covered bonds linked to mortgages on foreign markets in September.
The European Central Bank raised all three key interest rates by a quarter percentage point at its meeting in Berlin on Thursday. The deposit rate rose to 2.5 percent. President Christine Lagarde justified the move, citing persistent inflationary pressures linked to the conflict in the Middle East. Inflation in the eurozone reached 3.3 percent in August, with energy prices rising by 14.3 percent. The ECB estimates average inflation for this year at three percent, and the outlook remains highly uncertain.
The Prague Stock Exchange returned to growth after two days of declines. On Thursday, the PX index rose by 0.58 percent to 2802.44 points, once again exceeding the 2800-point threshold. The insurance company VIG was the main driver of the increase, while ČEZ securities remained stagnant and shares in defense companies fell slightly.
The CNB's Bank Board decided to leave the setting of the countercyclical capital reserve rate unchanged. The previous decision remains in effect: that from July 2027, the rate will increase to 1.5 percent from the current 1.25 percent. The central bank also stated that it is prepared to raise the rate further if necessary. Board member Eva Zamrazilová said on Thursday that the CNB's key interest rates should remain unchanged for now.
Czech banks issued a large package of covered bonds, linked to mortgage loans, on foreign markets in September. There was extraordinary interest in the issue among global investors. For domestic banks, this is a relatively cheap way to finance mortgages, which allows them to maintain their offerings even in an environment of high interbank rates.
ČEZ announced plans to further increase investment in renewable energy sources. The group intends to intensify wind and solar energy projects in the Czech Republic and abroad as part of its medium-term investment plan, a move that is partly in response to rising electricity prices due to the situation in the energy markets.
gnews.cz - GH