Poor crown than anticipated, rapid salary growth and more inflation. These are the reasons why the Czech National Bank (CNB) raised this year's fifth key interest rate for which commercial banks store billions of CZKs at the CNB, and hence the prices of financial products such as mortgages. So called. The two-week REPO rate has risen from 1.5 to 1.75 percent on November 1st.
This year's prices have probably risen. Governor HBIija Jiri Rusnok said that if the next development is in line with the economic forecasts, "this year it is from the point of view of raising interest rates behind us". But if the crown is weakened, the central bank will raise interest rates this year.
The rise in interest rates in the economy can already be seen. Despite this, the growth of interest on the CNB side reflects on end-user customers, partly due to the strong interbank competition. "Namely, for mortgages since the beginning of this year, we see an increase by a quarter percentage points and we can expect another clear increase in the coming months," says Michal Skořep, analyst Česká spořitelne.
The rise in the price of housing loans also undermined the new CNB recommendations, which were in place since the beginning of October. Banks now need to approve mortgages only to applicants whose total total debt does not exceed nine times their annual net income, and that monthly pay offs will not exceed three quarters of net monthly income. Before adopting this recommendation, banks have largely attracted customers at lower interest rates.
Since the summer, several banks have even raised interest rates on savings accounts, but there are still only a few cases. The biggest banks do not raise prices.
"Market competition before the introduction of new mortgage rules has been demolished, regardless of the key interest rate rise, of the mortgage rate. But this is just one impact that has already faded," says Helena Horská, chief economist at Raiffeisenbank.
Since the summer, several banks have even raised interest rates on savings accounts, but there are still only a few cases. The biggest banks do not raise prices. According to analysts, the central bank itself and its foreign exchange obligations ended in April last year.
"The entire banking market has still undermined a large amount of liquidity created by the CNB during the course of the foreign exchange rate," said economist INN Bank Jakub Seidler. As of November 7, 2013, the CNB issued about two trillions of crowns for intervention for about 41 months to 6 April 2017.
"This means that surplus liquidity continues to affect the market because the crowns remain in the system and do not disappear nowhere. When the CNB now raises interest rates, it is not as fast as it used to be in the past, even for interest on loans. , The CNB has raised the rate by 1.5 percentage points in the last period, but interest rates on mortgages have risen between today and mid 2017 through August 2018 for only 0.6 percentage points, "Seidler adds.
Preparing for bad times
In the opinion of the economist, the CNB is also preparing to increase rates, unlike, for example, the European Central Bank (ECB), which has record rates, land for the worst time. At a time when the crisis will come and the rate will have to be reduced, the CNB will have far more room for maneuver.
Four of the seven members of the Bank's Board voted to raise rates by a quarter percentage points, one who wants to raise rates by half a percentage point, one by one.
"The CNB is definitely creating space, while the ESB is not in space. In the eurozone, there is still a new euro, and we hope it will do well," said Petr Dufek of ČSOB.
Four of the seven members of the Bank's Board voted to raise rates by a quarter percentage points, one who wants to raise rates by half a percentage point, one by one. At the same time, it is the last meeting of the Council in its present composition, because in December it changes its two members, the current deputies of the headmaster of Mojmira Hampl and Vladimír Tomšík. This will be replaced by economist and adviser Andrej Babiš Aleš Michl and head of CNB Monetary Department Tomáš Holub. However, even those who do not expect too much from the CNB to deviate from the established rates in deciding on further development rates.