CNB Bank Board decisions

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4th Situation Report on Economic and Monetary
Developments
18 June 2026
Press conference of the Bank Board

Monetary policy decision
The decision adopted by the Bank Board is underpinned by the spring (May) macroeconomic forecast and by an assessment of information obtained since it was prepared. At the same time, the Bank Board confirmed its determination to continue its monetary policy in order to maintain inflation near the 2% target in the long term. At present, this requires relatively restrictive monetary policy. LEAVE UNCHANGED at 3.50% INCREASE to 3.75% 2.75% discount rate 3.75% 2W repo rate 4.75% Lombard rate At its meeting today, the CNB Bank Board increased the 2W repo rate by 0.25 percentage point to 3.75%. At the same time, it decided to increase the discount rate to 2.75% and the Lombard rate to 4.75%. Six members voted in favour of this decision, one member voted for leaving rates unchanged.

Economic developments

• Year-on-year GDP growth slowed to 2.2% in 2026 Q1 from 2.7% in 2025 Q4. Domestic demand was still
  the main source of economic growth, while foreign trade acted against growth.
• Unemployment remains low. Long-term above-average wage growth is contributing to inflationary pressures
  from the domestic economy. These are reflected mainly in persistently elevated services inflation and significant growth in property prices. This is amplified by the fact that, over the long term, wages are growing fastest in the service sector.

Comparison of current domestic data with the CNB forecast Note: annual changes in %, share of unemployed persons in % (comparison of s.a. outcomes in April and May with the forecast for 2026 Q2).

External environment: forecast and outlook for the euro area Note: Developments in the euro area are approximated by developments in the “effective euro area” – the six euro area countries with which the Czech economy has the strongest trade links.

External environment: oil price and the USD/EUR exchange rate

Inflation forecast and expected outcome in 2026 Q2 Note: year on year in %.

GDP forecast and outcome in 2026 Q1
Note: y-o-y changes in %; prices of 2020 (chain-linked); seasonally adjusted.

Exchange rate forecast (CZK/EUR) and outcome in 2026 Q2

Risks and uncertainties
The Bank Board assessed the risks and uncertainties of the outlook for the fulfilment of the inflation target as inflationary overall. Inflationary risks:

• persistence of core inflation
• possible acceleration in the growth of the money supply in the economy caused by lending to households and general
  government
• continued rapid wage growth related to persistent tightness in the labour market
• inertia in elevated services inflation, including rent
  Anti-inflationary risks:
• weak performance of some euro area economies
• possible global correction of asset prices in an environment of increased geopolitical uncertainty and high levels of
  debt in some developed countries
  Uncertainty:
• development of the war in Ukraine
  Despite the de-escalation of the conflict in the Middle East, the Bank Board will continue to closely monitor its macroeconomic impacts.

Statutory mandate

• The Bank Board assures the public that the CNB’s actions will be sufficient to maintain price stability in
  accordance with its statutory mandate.
• In addition, the Bank Board is ready to react appropriately to any materialisation of the risks of the outlook
  for the fulfilment of the inflation target.

4th Situation Report on Economic and Monetary
Developments
The minutes of today’s meeting and an update of the inflation forecast will be released on 25 June 2026 at https://www.cnb.cz/en/monetary￾policy/bank-board-decisions/

Decision in a nutshell
3.75%
Consistent with the spring forecast is a rise in short-term market interest rates. The Bank Board assessed the risks and uncertainties of the outlook for the fulfilment of the inflation target as inflationary overall. The Bank Board increased the key interest rate (2W repo) by 25 basis points to 3.75%. Six members voted in favour of this decision.