Prague - The Czech Republic's central bank Wednesday cut its benchmark interest rate by 50 basis points in a bid to boost the country's economy which is bracing for a severe slowdown next year.

The Czech National Bank slashed the benchmark two-week repo to 2.25 per cent, the lowest level since October 2005 in a second dramatic cut in a row. The bank already cut the key rate by 75 basis points on November 6.

The cut brought the rate below that in the eurozone. The European Central Bank delivered a 75-basis-point cut on December 4, bringing the key rate in the 15 countries using the euro to 2.5 per cent.

The Czech Republic was largely spared the meltdown on world's financial markets but its export-driven economy is expected to slow down significantly owing to falling demand in Western Europe, country's major export market. (dpa)