Minutes of the extraordinary monetary policy meeting of the Bank Board on 12 May 2022

Present at the meeting: Jiří Rusnok, Marek Mora, Tomáš Nidetzký, Oldřich Dědek, Tomáš Holub, Aleš Michl.

At its extraordinary monetary policy meeting, the Bank Board assessed the evolution of the koruna exchange rate in the context of inflation and the overall economic and monetary policy situation, including the financial market situation.

The Bank Board stated that the weakening of the koruna in recent days had led to an inappropriate easing of the monetary conditions. This was undesirable with regard to the fulfilment of the price stability mandate in a situation of high and still rising inflation and a risk of inflation expectations becoming unanchored.

A majority of the Board agreed that an early intervention of the CNB on the foreign exchange market was needed to send out a clear signal that the CNB remained ready to use all its monetary policy instruments to meet the 2% target. 

The Bank Board therefore decided to launch foreign exchange market interventions. The goal was to prevent a longer-term weakening of the koruna in a situation of high inflation. The CNB has large international reserves, even by international comparison.

In addition, the Bank Board decided that the programme of sales of part of the income on international reserves would be suspended while the interventions were going on.

Author of the minutes: Petr Král, Executive Director, Monetary Department