2024: CNB brought inflation down to 2% target and made record profit

The Czech National Bank (CNB) made a profit of CZK 151.4 billion in 2024, the highest in its history. The record profit was driven, among other factors, by measures implemented by the Bank Board over the past two years. In 2024, the CNB thus managed to erase another part of its accumulated loss, which had reached CZK 487 billion in 2022. At the same time, the central bank restored price stability in the country last year. Maintaining price stability is its primary objective.

In addition to price stability, the Bank Board has focused on achieving greater efficiency and long-term sustainable profitability of the central bank over the past two years. “Our main mandate is low inflation and financial stability. In the space of two years, we reduced inflation from 17.5% to our target of 2% in February 2024,” said CNB Governor Aleš Michl. In 2024 as a whole, average inflation was 2.4%, the lowest in six years. “However, we are also looking at how to eliminate the accounting loss we inherited from the previous Bank Board. Our goal is to lay the foundations for a long-term profitable central bank for future generations,” he added.

The CNB has taken a variety of measures to improve its profits. For example, it is gradually adjusting the composition of its international reserves, which are among the highest in the world relative to GDP. These reserves guarantee the CNB full independence in the conduct of monetary policy. However, they also make its profits very volatile, as they are held in foreign currencies and are thus sensitive to movements in the koruna’s exchange rate. The Bank Board has therefore decided to boost the potential long-term returns on the international reserves by gradually increasing the share of equity investments. At the same time, the CNB is buying gold to diversify the portfolio and make it less volatile. In 2024, this strategy, combined with favourable market conditions, delivered very solid portfolio performance, as reflected in returns totalling CZK 161 billion.

The exchange rate also had a positive impact on last year’s profit. The koruna depreciated against the euro and the US dollar at the start of the year and remained relatively weak until December. This resulted in a foreign exchange gain of CZK 137 billion.

Although the CNB posted its best-ever profit, its performance in the years ahead will be affected by a number of variables, such as changes in market conditions and exchange rate fluctuations. The record profit in 2024 should thus be viewed with caution. It should not be automatically assumed that the CNB will make such large profits in the coming years.

The gradual lowering of the CNB’s key interest rate caused the cost of conducting domestic monetary policy to fall from CZK 187 billion in 2023 to CZK 145 billion in 2024. The CNB has also changed the reserve requirement parameters over the past two years. It ended the remuneration of the minimum reserves of banks and credit unions in October 2023, and it increased the reserve requirement ratio with effect from 2 January 2025. “We are reducing the cost of conducting monetary policy without compromising its effectiveness. That said, we are also looking for savings in the CNB’s operations, as we believe that public institutions should be managed efficiently as well,” Aleš Michl added.

Thanks to a series of measures adopted by the Bank Board, operating expenses rose by just 1.3% year on year in 2024, the lowest increase in ten years. A 5% reduction in the number of employees, a streamlining of the CNB’s organisation structure and changes to internal competences contributed to a substantial slowdown in the growth of personnel costs, which rose by only 0.5% year on year. This efficiency drive made it possible to maintain solid, 4.4% growth in staff pay while keeping down growth in total operating expenses. The branch network is also currently undergoing an extensive transformation. A key part of this process is the transition to digital communication, which will soon significantly simplify and speed up services for all clients regardless of their region. It will also foster further operational savings in the future.

Thanks in part to the positive impact of these and other measures on the CNB’s profits, the Bank Board has succeeded in reducing the CNB’s accumulated loss of previous years by CZK 210 billion over the last two years. This loss currently amounts to CZK 277 billion.

Details on the CNB’s profit are available in the financial report and financial statements for 2024 approved by the Bank Board at its meeting on 20 March.

The CNB is not a part of the public budgets of the Czech Republic. It is not funded by taxes and its expenses are not covered by the taxpayer.

CNB profit/loss 2022–2024

Jakub Holas
Director, CNB Communications Division

^[1] The accumulated loss for 2023 was revised due to a change in the accounting method. For details, see the CNB’s financial statements as of 31 December 2024, section 2.25.