Czech National Bank shocks market by raising interest rates

The Czech National Bank surprised markets by raising its basic interest rate by 25 basis points, sending the value of koruna to just under CZK 25 per euro. That's the highest value the currency has stood at since October 2012. It also strengthened to CZK 22.76 / USD. The CNB was reacting to what it sees as unacceptably high inflation levels when it rose the basic rates to 2.25 percent. Shares on the Prague Stock Exchange rose 1 percent to 1114.6 percent, with Erste Bank rising 4 percent (to CZK 875) and Komerční banka by just 2 percent (to CZK 821).