Czech central bank keeps countercyclical buffer rate unchanged (updated)

Moneta Money Bank, A.s

27/11/2024 15:06

(Adds details from the bank's statement in paragraphs 3-7)
       PRAGUE, Nov 27 (Reuters) - The Czech National Bank (CNB)
kept the countercyclical buffer rate for banks at 1.25% on
Wednesday, it said, and also left mortgage lending rules in
place.
    The bank, after a financial stability meeting, said the
Czech financial sector was sound and resilient to potential
adverse shocks.
    The bank assessed the extent of cyclical risks in the
banking sector's balance sheet and said it expected risks to
increase gradually over its forecast horizon, but that the
current countercyclical buffer rate was sufficient to cover this
increase.
    If the economy continues to move into the growth phase of
the financial cycle, the CNB is ready to increase the buffer
rate, it said.
    It said the sector was well capitalised and also withstood a
stress test focused on risks linked with climate change,
including the possible consequences of the transition away from
fossil fuels and of potentially higher energy prices.
    It said the economy was at the beginning of a growth phase
of the financial cycle and that the mortgage market and house
prices were picking up. 
    "However, the risk of excessive growth in mortgage loans
remains low for now. In this environment, we consider it
appropriate to leave the LTV limit unchanged,"  policymaker
Karina Kubelkova said, referring to a loan-to-value limit at
80%, or 90% for younger borrowers.

 (Reporting by Jason Hovet)
 ((jason.hovet@thomsonreuters.com;))