The Czech koruna declined today to the lowest level since July 2010 after minutes of a central bank’s policy meeting showed that policy makers anticipated slower economic growth in the country.
Minutes of the Czech National Bank spoke about economic slowdown:
It was said several times that the Czech economy was slowing and that no domestic demand-pull inflation pressures were apparent.
The slowing growth was attributed mainly to the European crisis:
The opinion was expressed several times that owing to the external situation there were risks and uncertainties that were difficult to quantify. It was said that a large part of the uncertainty was linked with the inconsistency of political solutions to the debt crisis over the past year.
The central bank thinks that performance of the nation’s currency is important for future monetary policy decision. Moves in any way may have a negative impact on the economy as a stronger currency tightens fiscal conditions, while a weaker currency makes imports more expensive. The bank predicted that the koruna will advance this year.
USD/CZK closed at 20.3380 after opening at 20.1910 today. Earlier, the currency pair reached 20.4060 — the highest level since July 2010.
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