Czech Central Bank Slashes Interest Rate To Historic Low

The central bank of the Czech Republic on Thursday lowered its policy interest rate to a record low after the economy slipped into a recession in the second quarter. The decision was in line with economists' forecast.

The Czech National Bank reduced its two-week repurchase rate by 25 basis points to 0.25 percent after keeping it unchanged since June, when it cut the rate by a quarter percent to 0.5 percent.

The bank also decided to lower the Lombard rate by 75 basis points to 0.75 percent and the discount rate 15 points to 0.1 percent.

The Czech economy contracted for the second consecutive quarter in the June-quarter, singling a recession. Gross domestic product dropped 1 percent year-on-year, after falling 0.5 percent in the first quarter. The country's inflation accelerated to 3.3 percent in August from 3.1 percent in July.