25th September 2014

Czech National Bank Fear of Deflation Continues

As governor of the Czech National Bank Miroslav Singer confirmed after the meeting of the banking council that the monetary intervention will last at least until the end of 2016. The unsatisfactory state where anti-inflation risks prevail is according to the governor not caused by the situation on Ukraine that doesn’t affect it that much but mostly by the unsatisfactory result of the first row of cheap bank loans to commercial banks by the ECB when the commercial banks used less than 25 % of total amount. Chief economist of Roklen group Lukáš Kovanda said to this that after the announcement the Czech National Bank was less likely to introduce new interventions and it could lead the effort to the European Central Bank. What doesn’t change is that the Czech National Bank would continue to intervene on the CZK exchange rate and would keep it near the level of 27 CZK for 1 EUR.

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Members of the American Chamber of Commerce in the Czech Republic