The Prague Stock Exchange slightly increased on Wednesday, despite losses in ČEZ shares, primarily driven by Erste Bank shares reaching a 22-year high. The key event of the day is today's meeting of the Czech National Bank (CNB) board, which will decide on interest rates after ten months at a level of 3.5 percent. The Automotive Industry Association announced that the production of passenger cars in the Czech Republic increased by 4.7 percent in the first five months of this year, with more than two-fifths of the produced vehicles being electrified. Mortgage rates remain elevated, around 5.3 percent.

The Prague Stock Exchange slightly increased on Wednesday, despite losses in shares of the energy company ČEZ, which accounted for most of the total trading volume. The PX index rose by 0.20 percent to 2,588.24 points. Gains in securities of the Erste Bank group, which reached their highest price in 22 years, as well as in the defense companies Czechoslovak Group and Colt CZ, contributed to the increase.

The production of passenger cars in the Czech Republic increased year-on-year by 4.7 percent to 639,681 vehicles in the first five months of this year. Of these, 41 percent were electrified vehicles, including hybrids and electric cars. This was announced by the Automotive Industry Association.

The CNB board is today deciding on interest rates at its regular monetary policy meeting. The basic repo rate has remained at 3.5 percent for ten months, and all previous decisions to maintain it have been unanimous. However, this time, analysts are divided on the expected outcome – some expect a first cautious reduction of 0.25 percentage points due to falling oil prices and a stronger Czech crown, while others expect another pause, considering the interest rate increase by the European Central Bank last week. The decision will be announced this afternoon, and the governor, Aleš Michl, will explain the reasons and the voting ratio at a press conference.

Mortgage rates remain elevated. The average value of the Hypoindex in June rose to 5.30 percent, after banks factored in more expensive money in credit prices on the European interbank market. According to current data, ten-year fixed rates are approaching the 5.74 percent threshold. Today's decision by the CNB will therefore have a direct impact on the direction in which mortgage rates will move in the second half of the year.

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