Agreement between the Czech Government and the Czech National Bank

Joint press release of the Ministry of Finance of the Czech Republic and the Czech National Bank

The Government of the Czech Republic and the Czech National Bank have today agreed on a set of measures aimed at preventing public sector operations from having undesirable effects on the foreign exchange market and subsequently on the macroeconomic stability of the Czech Republic.

The CNB and the Government have agreed that currency conversions of financial flows between the Czech Republic and the EU authorities will continue to be effected as far as possible off the foreign exchange market. The Government will ensure that no bodies within its field of competence conduct conversions of fund inflows from the EU on the market and conduct any hedging or speculative operations affecting the foreign exchange market. Furthermore, no conversions of the Government’s privatisation revenues will be conducted on the foreign exchange market. These revenues will be either deposited on a foreign currency account with the CNB or managed in foreign currencies as a reserve for the pension reform.

If the Czech Ministry of Finance issues bonds denominated in foreign currency in the coming years, these will be hedged against exchange rate risk in such a way as not to affect the exchange rate.

• Presentation Report for Government Meeting (pdf, 12 kB)
  
• Joint Agreement Between the Czech Government and the Czech National Bank (pdf, 15 kB)
  
• Updated Strategy for Dealing with the Exchange Rate Effects of Foreign Exchange Revenues of the State  (pdf, 32 kB)