Czech central bank cuts key interest rate to 1,75 %, saying new economic forecast is consistent with decline in market interest rates. However, governor Zdeněk Tůma said he could imagine we are close to the bottom of the rate cut cycle.
CNB has lowered GDP forecast, now expecting 0,3% contraction in 2009 and 0,9% growth in 2010. CPI is expected at 1,4 % in 1Q 2010 and 2,1% in 2Q 2010.
The bank sees average EUR/CZK rate at 25,8 in 2009 and 25,6 in 2010, and says current CZK drop is overshooted.