Czech Republic: CNB to Intervene in Forex Market

Politics ♦ Published: November 11, 2013; 10:49 ♦ (Vindobona)

After the Czech koruna (CZK) was devalued, the Czech National Bank (CNB) is keen on preventing a deflation. However, the key rate cannot be cut anymore as it is close to zero.

Czech Republic: CNB to Intervene in Forex Market / Picture: © Czech National Bank

Since the reference rate is already at a record low, there is no downside potential anymore. As a result, weakening the Czech koruna is the last instrument for the CNB, which fears a drop in consumer prices and has been warning of the danger of a deflation for months, which could stop economic growth for a significant period of time.

Last week the CNB Bank Board decided at its…

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