Czech Central Bank Expected to Exit CZK Weakening in Mid 2015

The Czech central bank on Thursday pushed back its expected exit from a policy of keeping the crown currency weak until no earlier than the second quarter of 2015, citing anti-inflationary risks.

The bank’s board had earlier signalled that its commitment to intervene to weaken the crown if necessary would stay in place at least until the start of 2015. It said on Thursday it did not rule out a further change in the timing of any end to its loose policy.

The bank has pledged to keep the crown close to 27 to the euro while letting it float freely on the weaker side of that level. It reiterated on Thursday that keeping this policy in place was preferable to shifting to an even weaker crown level to loosen monetary conditions.

The crown was a touch weaker on the day, but still within the middle of its traded range of recent months at 27.460 to the euro, down 0.1 percent from Wednesday’s close.

At a regular meeting on Thursday, the bank also kept its benchmark two-week repo rate at a record low of 0.05 percent, where it has been since November 2012.

via Reuters

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