Czech National Bank may intervene due to strong crown

The Czech National Bank is ready to react to any sharp movements of the Czech currency rate, the bank’s governor Zdeněk Tůma told Financial Times Deutschland on Monday. He told the paper that the Czech National Bank would intervene if the Czech currency rate wavers too much. The changing rate of the Czech crown could have a negative impact on inflation which increased to a six-year maximum in November last year. The Czech crown has been strengthening since the beginning of the year and reached the rate of 26.1 crowns to the euro. This enables the National Bank to increase interest rates more slowly while the main interest rate is now set at 3.5 percent, the lowest of all European Union countries.

Author: Jan Richter