published: 13.01.2014, 14:04 | updated: 13.01.2014 14:12:41
Prague - The Czech National Bank (CNB) posted a Kc73.2bn profit last year, against a profit of Kc2.9bn a year earlier, and forex interventions which the CNB launched in November to weaken the crown currency are the reason, the central bank said today.
Like in the previous year, the CNB will use the profit to cut accumulated losses of Kc123.6bn from previous years.
"Revenue from foreign exchange reserves management accounted for one third of the preliminary profit figure. Two thirds are exchange rate effects arising from the market appraisal of the central bank´s forex reserves," said CNB spokesman Marek Petrus.
The CNB said earlier a weaker crown would have a positive impact on its performance in a medium-term horizon. The weaker crown raises the value of forex reserves denominated in crowns resulting into an accounting profit of the CNB.
"In the long run, however, the increased value of foreign exchange reserves will make the CNB´s financial results more vulnerable to the crown´s development but based on calculations, this will not have a major effect on the CNB´s ability to cover the accumulated losses in the future," the central bank said on the Internet.
Referring to the Constitution, the CNB said its main objective is price stability not maximising its profits.
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