At the last monetary policy meeting of the Czech National Bank’s (ČNB) Bank Board, chaired by outgoing Governor Jiří Rusnok, the central bank raised its base interest rate by 1.25 percentage points to seven percent. The ČNB announced this on its website on Wednesday. The sharp increase is a continued effort to tame rising inflation.

The current base rate of seven percent is the highest since May 1999.

This is the ninth time that the ČNB board has decided to raise the interest rate. It started raising the rate in June last year and eventually increased it five times. This is the fourth increase this year and the most significant one.

The Board also decided to raise the discount rate by six percent and the Lombard rate to eight percent.

In addition to Rusnok, the Board on Wednesday also included Deputy Governor Tomáš Nidetzký and board member Vojtěch Benda. Aleš Michl will become the CNB’s new chief in July, while Eva Zamrazilová, who will become deputy governor, Karina Kubelková, and Jan Frait will join the Board.

Michl has been an opponent of the rating board, so some analysts expect this to be the last sharp increase.

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