The rate hike, widely expected, follows a similar increase by Hungary's central bank on Tuesday that was the first in the European Union in the aftermath of the pandemic.
Irish businesses have been shut cumulatively for a longer period than any other European Union country over the last 11 months and have been back in a strict lockdown since late December that is set to run at least into April.
They see the change in hours worked as a reasonable proxy for the impact of the pandemic on the labour market.