The Czech central bank cut its key interest rate for the second time in an attempt to help the economy, the Associated Press reports.

The reduction is half a percentage point to 6.25 percent, after the bank cut base rates by a quarter point on December 21. The contraction then was the first since June 2022.

In 2021 and 2022, the bank made a series of hikes in key rates to tackle galloping inflation, pushing rates as high as 7 percent, their highest level since early 1999.

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Partly as a result of the bank's actions, the country's inflation fell to 10.7 percent in 2023 from 15.1 percent in 2022, data from the Czech Statistical Office showed, well above the 2 percent target set from the central bank.

In the last quarter of 2023, the Czech economy shrank by 0.2 percent on an annual basis, notes BTA. 

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