16th January 2018

IMF interview with Central Bank Governor J.Rusnok: Czech Republic: Economy So Far So Good | Ekonom: CNB will start publishing its expectations of CZK exchange rate from February 2018

This is last article in a series of six interviews of IMF with policymakers from Central, Eastern, and Southeastern Europe. Central bank governors and finance ministers discuss how their countries are doing in terms of catching up to Western Europe. What are the main obstacles for reaching the same living standards in the East as in the West? We conducted the interviews during aconference on economic governance within Europe that was held in Dubrovnik, Croatia, in July 2017.


The Czech Republic is doing well: its growth at 2.4 percent is strong, unemployment at 3.3 percent is the lowest in the European Union, and its government debt is low. Yet the country must continue to improve the quality of its human capital and monitor mortgage loans if growth is to last. We sat down with Jiří Rusnok, Governor of the Czech National Bank to discuss recent developments. 

In April, the central bank removed the upper limit of the euro exchange rate after three and a half years because inflation has started to move upwards. What is your experience after the shift? 

For three years, we put a cap on the koruna-euro exchange rate as an unorthodox measure at a time of very low inflation, well below our target of two percent. But once we brought inflation back, close to or even slightly above the target, and assessed it to be sustainable, we decided to drop the cap. That was in the beginning of April. Of course, we prepared the market and public beforehand. 

Afterwards, in what we saw as a very positive sign, there was no extraordinary volatility on the foreign exchange market involving the koruna. The Czech currency even started to appreciate slightly, and I'd say, unexpectedly. From our perspective, it was a positive move, signaling the beginning of a tighter monetary stance. So far, so good....

Read full interview (published in October 2017): Source: International Monetary Fund (IMF)


IMF previous interviews feature Octavian Armasu, Moldova’s Minister of Finance, Sergiu Cioclea, Governor of the National Bank of Moldova, Boštjan Jazbec, Governor of the Bank of Slovenia, Martina Dalić, Deputy Prime Minister and Minister of Economy of Croatia, Oleksandr Danyliuk, Minister of Finance of Ukraine, and Bedri Hamza, Governor of the Central Bank of Kosovo at the time of the interview. 



In a recent interview (in Czech) for the Ekonom weekly, Jiří Rusnok says: "The Czech National Bank will start publishing its expectations of the koruna exchange rate from February 2018 onwards. The reason for the intervention of the Bank would not be even the strengthening of the Czech currency to the level of 25 crowns per euro." 

Members of the American Chamber of Commerce in the Czech Republic