September 6, 2019 / 7:40 AM / 3 months ago

Czech central bank: low likelihood of further countercyclical buffer rate increase

PRAGUE, Sept 6 (Reuters) - The Czech central bank (CNB) said on Friday a further increase of the countercyclical capital buffer (CCB) rate for banks was unlikely.

The bank kept the buffer rate, which only a handful of European countries have implemented, unchanged at a meeting in August. The buffer now stands at 1.50% and will rise to 1.75% from January 2020 and to 2.00% from July next year.

“Given that the domestic economy is probably close to the peak of the financial cycle, the likelihood of a further increase in the countercyclical buffer rate is low,” the bank said. “The CNB stands ready to lower or completely zero the rate in the event of a sudden turnaround in the financial cycle.”

Reporting by Jason Hovet; Editing by Catherine Evans

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