The CNB Bank Board decided at its meeting today to lower the two-week repo rate by 25 basis points to 0.25%. The Lombard rate was lowered by 75 basis points to 0.75%. The discount rate was lowered by 15 points to 0.10%. The new interest rate levels come into effect on 1st October 2012.
The CNB last eased monetary policy on 28 June 2012, when it lowered the repo rate by 25 basis points to 0.50%.
Discount rate: A monetary policy rate which as a rule represents the floor for short-term money market interest rates. The CNB applies it to the excess liquidity which banks deposit with the CNB overnight under the deposit facility.
Lombard rate: A monetary policy interest rate which provides a ceiling for short-term interest rates on the money market. The CNB applies it to the liquidity which it provides to banks overnight under the lending facility.
Repo rate: The CNB’s key monetary policy rate, paid on commercial banks’ excess liquidity as withdrawn by the CNB in two-week repo tenders.
Source: Press release by CNB