The discount rate is another of the three interest rates set by the CNB, alongside the Lombard rate and the repossession rate. It is also referred to as the Automated Deposit Facility.
What is the discount rate?
The discount rate is one of the monetary policy instruments of the Czech National Bank, which uses this method to earn interest on free funds deposited with it by other banks. It is usually a positive interest rate; the CNB uses the discount rate to regulate the amount of money in the economy.
Did you know that if the CNB lowers the discount rate, loans will become cheaper; if it raises it, loans will become more expensive?
