Czech inflation eased to an annual 2.0% in February, data showed on Monday, hitting the central bank's target for the first time in more than five years and keeping the path clear for interest rates to drop.

The February reading was the first time since December 2018 that headline inflation was exactly at the Czech National Bank's 2% inflation target, which it seeks to maintain with a one percentage point tolerance band either way.

Inflation fell to 2.3% in January after ending 2023 at near 7%.

The statistics office said food prices were a main driver in the year-on-year slowdown. In month-on-month terms, prices rose 0.3%.

Rate setters have said they will be cautious in cutting rates in an easing cycle that started in December. They have reduced the two-week repo rate by 75 basis points in two steps, taking it to 6.25% last month. (Reporting by Jason Hovet in Prague; Editing by Nick Macfie)