Luděk Niedermayer comments on the koruna exchange rate

The response of CNB Bank Board Member and Chief Executive Director, Luděk Niedermayer, to the numerous questions raised by the media today regarding the koruna's appreciation:

"In the past few weeks, the koruna's exchange rate against the euro has been continuing to strengthen. I consider this trend disturbing," says Luděk Niedermayer. "I believe that from the point of view of both the general macroeconomic trend and the course of inflation, a weaker koruna exchange rate would be more appropriate. It would also boost the competitiveness of the Czech economy.

"From the central bank's perspective, I would add that the interest rate level is not only failing to stimulate inflow of capital, but in some segments is supporting an outflow.

"I believe that under certain circumstances the central bank will intervene. But I certainly would not connect this with the fact that the koruna is now at the level at which the previous interventions were made. The central bank monitors the exchange rate from the point of view of the trend and not from the point of view of developments on individual days. It decides on interventions after assessing longer time periods."

Responsible:
Milan Tománek
CNB spokesman