After Poland and Hungary recently raised rates, Romania and the Czech Republic have both announced decisions to hold, at 6.25 and 0.75 per cent, respectively. It was a close shave in the Czech Republic, however, with 3 of the 7 members voting for a 25bp rate rise. Last meeting only one member voted this way.
Neither country has raised rates since the financial crisis, though in terms of inflation, at least, that is where the similarities end. Czech inflation is running at just 2.3 per cent while Romania’s prices rose 7.96 per cent in the year to December, significantly above the 3.5 per cent target. Raising rates to counter inflation would be tricky, however, as the currency, the leu, is already strong by historical standards: Read more