Czech National Bank raises interest rates to highest level in 20 years

The Board of Directors of the Czech National Bank announced another significant increase in interest rates. The base rate will rise by 0.75% to a total of 4.5%, the highest level seen in the Czech Republic since January 2002. Five board members favored a rate increase, while two wanted them keep unchanged. The majority decision is an attempt to tackle inflation, which the Bank expects to hit 9.2% in January and move even closer to double-digits in February. The increase in National Bank interest rates will likely lead to higher commercial loan rates for individuals and businesses.

The Czech Republic and Poland have reached an agreement to end the dispute over the Turów coal mine after years of disputes. The agreement was announced today in Prague by Czech Prime Minister Petr Fiala and Polish leader Mateusz Morawiecki. The agreement includes the construction of a barrier against groundwater to protect the water supply on the Czech side of the border, the construction of a wall to prevent dust and noise from reaching Czech territory, inspections by the Czech authorities and compensation of 45 million euros to be paid by Poland to the Czech Republic. 35 million of this amount will go to the Liberec region for the construction of the necessary infrastructure to ensure continuous access to drinking water.

Czechs are spending more per card than at the same time last year, according to new data from Česká spořitelna. The bank says card transactions, including ATM withdrawals, were up 23% year-on-year last week. The level of card transactions was 18% higher than in the pre-pandemic era. Spending has been particularly high in pharmacies, with a 40% increase in registered card payments compared to the same period in 2020. Spending on food and electronics is also much higher than before the pandemic. However, ten percent less is spent on accommodation services.

Former health minister Adam Vojtěch, who led the Czech Republic for much of its pandemic response, will become the Czech ambassador to Finland later this month. The appointment was confirmed today by the Ministry of Foreign Affairs. The possibility of Vojtěch becoming ambassador to Finland was first raised in early 2021, when Andrej Babiš’s government approved a list of new Czech ambassadors.

Polish Prime Minister Mateusz Morawiecki travels to Prague today to discuss bilateral cooperation with his Czech counterpart Petr Fiala. The Czech government announced the visit this morning, amid unofficial claims that a deal may have been reached over the disputed Turów coal mine near the Czech border.

A press conference is scheduled for 1 p.m. Last month, Fiala claimed that an agreement on Turów could be reached in the coming weeks. An international dispute erupted over the mine when Poland decided to extend operations at the mine, angering local Czechs who say it is seriously harming the local environment.

The Czech women’s hockey team beat hosts China in their first game at the Beijing Winter Olympics. The first-ever appearance of a Czech women’s hockey team at the Winter Olympics saw them triumph with a final score of 3:1. The goals were scored by Tereza Radová, Denisa Křížová and Michaela Pejzlová.

The team’s next match in Group B will be against Sweden on Saturday. The team’s performance in their first match portends promising things to come; the Czechs led from the eleventh minute, doubling their lead thirteen minutes later. China then made it 2-1, before the Czechs secured victory with another goal in the final period.

Prague University Hospital in Bulovka has launched a new sealed intensive care unit for the hospitalization of patients with contagious diseases. This is the hospital’s fourth so-called BioBox, but the first fully equipped for intensive care. He comes with devices for artificial lung ventilation, dialysis and other life-saving procedures.

The BioBox cost CZK 23 million to create. It is the only such facility in the Czech Republic. One would assume that the facility is intended to care for Covid-infected patients; but the hospital actually wants to use it for those with dangerous illnesses from abroad, such as hemorrhagic fever, Ebola or pneumonic plague. It will also be used for diseases encountered in the Czech Republic, such as legionella and meningitis. When a patient is admitted, the BioBox becomes vacuum sealed, with no air leaving the room. It has its own air conditioning and sewage sterilization equipment, while doctors caring for patients must wear waterproof protective clothing similar to spacesuits.

The Board of Directors of the Czech National Bank (ČNB) is meeting today to discuss a possible interest rate hike and to agree on new macroeconomic forecasts. Economists expect interest rates to rise another 0.75%, taking the base interest rate to 4.5%, the highest level since January 2002.

The bank quickly raised the base interest rate to fight rising inflation. In November, the ČNB predicted an average inflation of 5.6% in 2022, but it has since admitted that inflation could rise further. The current base interest rate of 3.75% is the highest since the global financial crisis of 2008.

The EU yesterday approved its controversial new energy taxonomy, including the decision to name nuclear and gas projects ‘green’ investments as long as they meet certain criteria. The move sparked controversy, including in the Czech Republic where conditions for nuclear projects were initially deemed harsh and unrealistic.

But the CEO of Czech energy conglomerate ČEZ, Daniel Beneš, praised the taxonomy, saying it points the EU in a positive direction that will see the Czech Republic transition to a zero-emissions economy. His comments came after the EU eased its deadlines for giving gas developments a ‘green’ label.