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Czech National Bank makes no change to crown cap

Prague Castle. Photo: Bohemist

The CNB left the benchmark at 0.05%, which comes as no surprise to experts.

By BOHEMIST STAFF

PRAGUE – Hoping to help along price growth, the Czech National Bank (CNB), the country’s central bank, decided to hang on to its current monetary policy, keeping in place a cap on the koruna’s exchange rate, according to the CNB.

The CNB left the benchmark at 0.05%, matching expectations among analysts, while also pledging to keep selling Czech Koruna to prevent the exchange rate from gaining past about 27 per euro, the bank said in a statement today.

The bank was also expected to present its outlook for an exit from the pledge, which it said would likely be in place until around mid-2017.

According to experts, the timing of this shift is of importance it is believed that the Czech Koruna is currently undervalued at the cap level. At the same time, analysts have said that they expect the stagnant currency to level-off once the cap is dropped, although the bank has made clear it would not allow the crown to strengthen sharply.

Bohemist

Bohemist is an upstart news outlet serving the Czech Republic. Feel free to write us at editor@bohemist.cz.

About Bohemist

Bohemist is an upstart news outlet serving the Czech Republic. Feel free to write us at editor@bohemist.cz.

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