In Business News: the Finance Ministry and the Czech National Bank agree on measures to fight the fast appreciation of the crown; the central bank’s governor says it is keeping interest rates low in order to avoid further firming of the Czech currency; the foreign trade surplus increased by ten percent; a new body is set up to prepare for euro adoption; and the biggest urban building project since 1989 gets underway in Prague.
Ministry and central bank agree on moves to fight crown appreciation
Central bank head says interest rates being kept low to avoid further firming of Czech currency
Meanwhile, the governor of the Czech National Bank said this week that interest rates were being kept low to avoid even greater firming of the crown. In an interview for a Hungarian magazine, Zdeněk Tůma said he was hopeful inflation could fall to 5 percent by September and could be back on track next year to reach 3 percent. Annual inflation was at its highest point in nearly a decade at the start of this year, though it has since fallen. In March it dropped to 7.1 percent from 7.5 percent the previous month.
Foreign trade surplus up 10 percent year-on-year
Despite the strong crown, exports from the Czech Republic remain healthy. In February the foreign trade surplus was CZK 14.3 billion, around ten percent higher than in the same month in 2007. The surplus has been attributed to increased exports of machinery, cars and electronics.