The Czech koruna managed to gain today despite signs that policy makers may refer to weakening the currency as a measure for spurring economic growth in the country.
Czech National Bank Governor Miroslav Singer said in an interview to Bloomberg today that he is going to keep monetary policy accommodative as long as risk of inflation missing the central bank’s target remains. He indicated that interest rates should remain near zero:
From my point of view, if monetary conditions were relatively clearly relaxed, I would still say that we are going to keep rates at zero in the long-term future.
The problem is that with near-zero interest rates cutting of borrowing costs is no longer an option for the central bank to revive the economy, so weakening of the currency may be the next move the bank will make to spur inflation.
USD/CZK fell from 19.6290 to 19.5880 as of 16:19 GMT today.
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