Czech central bank raises key interest rate to 0.25 percent

PRAGUE – The Czech Republic's central bank has raised its key interest rate to 0.25 percent, the first rate rise since February 2008.

The bank last cut its key interest rate in 2012 to 0.05 percent, the lowest since the country was formed in 1993 after the breakup of Czechoslovakia. The move was aimed at helping the struggling export-oriented economy.

But the economy has been booming recently with the lowest unemployment rate in the EU, while the inflation reached 2.3 percent in June, above the bank's long term target of 2 percent.

The Finance Ministry predicts the economy to grow 3.1 percent this year.

The Czech Republic does not use the common European euro currency but eurozone countries, including Germany, are its major trading partners.