CNB leaves rates unchanged, continues interventions against crown

Česká národní banka (ČNB), pražské sídlo.

published: 17.12.2013, 14:03 | updated: 17.12.2013 14:07:52

Prague - The Bank Board of the Czech National Bank (CNB) left interest rates at record-low levels at a policy meeting today and decided to continue forex interventions to keep the crown´s rate near Kc27/EUR, CNB spokesman Marek Petrus said.

The key interest rate stays at an all-time low of 0.05 percent for more than a year.

The governing board gave the green light to the interventions over the threat of deflation at its meeting on November 7. It also sought to further easy monetary conditions.

The Bank Board today reiterated that it sees as unilateral its pledge about the exchange rate of the crown. This means the CNB will be using interventions, that is selling crowns and buying foreign currencies, to prevent the crown´s firming well below Kc27 per euro.

If the crown weakens above the Kc27/EUR benchmark, the CNB will let the currency float depending on supply and demand on the foreign exchange market.

All seven members of the Bank Board attended the policy meeting.

A press conference after the meeting takes place at 14:30.

The CNB will be keeping the crown near Kc27 per euro for at least one year and a half, CNB governor Miroslav Singer had said.

Analysts believe monetary policy will see no change next year, which applies to interest rates as well as interventions. Economists say the CNB will only be watching for the crown to stay near the target of Kc27/EUR.

Some analysts, however, do not rule out that the central bank might step into the currency market to adjust the crown´s rate in the course of 2014.


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