June 13, 2017 / 8:10 AM / a month ago

Czech central bank raises countercyclical buffer rate to 1 pct

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PRAGUE, June 13 (Reuters) - The Czech central bank decided to raise the countercyclical buffer rate for domestic banks to 1.0 percent, from 0.5 percent, with effect from July 2018 due to rapid credit growth and as a precaution for "worse times", it said on Wednesday.

The central bank said it stood ready to either increase the rate further or to cut it back, depending on developments in the market.

The Czech banking sector remains stable and is still highly resilient to potential adverse shocks, the bank also said with the release of its annual financial stability report on Tuesday.

It added that the sector would maintain overall capital adequacy above the 8 percent threshold even in a "very unlikely" adverse scenario projected by the central bank's stress tests. (Reporting by Robert Muller and Petra Vodstrcilova; Editing by Jason Hovet)

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