Prague  - The Czech central bank cut the key two-week repo rate by a quarter point to 3.5 per cent Thursday despite high inflation in order to halt a rapid appreciation of the Czech koruna.

"The bank is fighting against the world's most appreciating currency," said Raiffeisenbank analyst Ales Michl. "It is so important for the bank to risk inflation."

The central bankers had hiked the key rate five times between May 2007 and February 2008 to fend off growing prices but have lately signaled intention to take a reverse step aimed at cooling the strong Czech currency.

Frankfurt  - The European Central Bank (ECB) left its key interest rate on hold Thursday amid growing economic concerns triggered by spiralling inflation and contracting growth.

London - The Bank of England Thursday kept interest rates on hold at 5 per cent in an attempt to balance inflation fears with growing signs of a serious economic slowdown.

Seoul  - South Korea's central bank raised its key interest rate Thursday to the highest level in seven and a half years in a bid to tame spiraling inflation.

The monetary policy committee decided to raise the base rate by 25 basis points from 5 per cent to 5.25 per cent, the Bank of Korea said.

It was the highest since early February 2001 and the first time the bank increased its interest rate since August 2007.

"The committee judges that this action should contribute to containing inflation expectations which have gathered strength influenced by the recent sharp rise in headline inflation," the bank said.

Unlike core inflation, headline inflation takes into account all types of inflation in an economy.

A shocking incident of fake currency notes came forward, when officials of Reserve Bank of India (RBI), along with sleuths of Uttar Pradesh Police on Monday evening raided the currency chest of the State Bank of India at Domariyaganj near the border with Nepal.

SBI currency chest, from where the cash for all the local branches is distributed, had the sum total of Rs 70 lakh missing. The racket was exposed during the raid at SBI currency chest.

“This racket has been thriving with the connivance of the bank staff, which was clearly found to be involved in clandestine replacement of notes with fake currency,” reported Additional Director General of Police, Brij Lal.

Frankfurt - The European Central Bank (ECB) is set to leave its benchmark refinancing rate on hold at 4.25 per cent Thursday, analysts predict, as it faces up to the twin economic threats of surging inflation and slumping growth.

This comes after firing off a warning shot at its meeting at the start of July to ward off resurgent inflation by lifting borrowing costs in the 15-member eurozone by 25 basis points.

But since then while signs have emerged of a pickup in inflation, the economic gloom surrounding the eurozone is starting to deepen as new grim economic numbers continue to roll in.

At 4.1 per cent, inflation in the eurozone is more than double the ECB's target of "close to, but just below 2 per cent."