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Czech to keep foreign exchange intervention unchanged

Xinhua, March 30, 2017 Adjust font size:

The Czech National Bank (CNB) Board decided at its meeting Thursday to continue the policy of foreign exchange interventions and keep the exchange rate close to 27 crowns per euro.

At the same time, CNB said it would also keep the interest rates unchanged.

Czech economist Marek Drimal said the CNB likely made the decision because many speculators are expecting to sell crowns at the end of foreign exchange intervention. CNB previously announced in February that it would continue the intervention until at least the end of the first quarter of 2017.

But CNB governor Jiri Rusnok warned that the end of intervention could occur at any time after the first quarter of 2017. He added that the central bank would not disclose possible scenarios for the timing of the end of the exchange rate commitment.

Rusnok reiterated Thursday that the central bank would be ready to deal with any excessive fluctuations of the crown after the end of the foreign exchange intervention.

CNB launched the foreign exchange intervention in November 2013 in order to weaken the crown and keep the exchange rate close to 27 crowns per euro. Endit