The Czech National Bank unexpectedly raised its main interest rate by 25 basis points to 3.75 percent, the first hike in four years. This puts the benchmark rate at exactly the same level as in Poland, surprising markets and analysts alike.
The decision, taken at the June meeting of the CNB board, was supported by six members, with one abstaining. It marks a sharp reversal from the long period of stability that had lasted since mid-2022. The increase brings the reference rate to 3.75 percent, identical to the current Polish rate, which has been unchanged for months.
A signal to the government and markets
Governor Alesz Michl explained the move as a response to rising credit growth and a warning against excessive public debt financing. – We want to curb the credit boom, limit the money supply in the country and support savings. It is also a warning signal against financing public spending with debt – said Michl.
Analyst Martin Kron of Raiffeisenbank interpreted the decision as an appeal to lower external financing costs. – This should be seen as a call for the government to reduce the cost of external borrowing – said Kron.
Political backlash and economic implications
Prime Minister Andrej Babisz openly criticised the tightening, arguing it will push up mortgage costs and potentially slow investment. – This move will increase the cost of mortgages and limit investment – stated Babisz.
The rate hike immediately strengthened the Czech koruna against both the euro and the Polish zloty, an important factor for the many Poles planning summer holidays in the Czech Republic. In May 2026, inflation in the Czech Republic stood at 2.1 percent, well below Poland’s 3.1 percent, which has led to a different debate in Warsaw – whether it is time to start cutting rates rather than raising them.
Źródło: WNP.PL, Fot. Boris Stroujko / Shutterstock
