At its meeting on 5 May, the Bank Board of the Czech National Bank decided unanimously to keep interest rates unchanged at technical zero. The Bank Board decided to continue using the exchange rate as an additional instrument for easing the monetary conditions and confirmed the CNB’s commitment to intervene on the foreign exchange market if needed to weaken the koruna so that the exchange rate of the koruna is kept close to CZK 27 to the euro. In line with this, the CNB still stands ready to intervene automatically, i.e. without the need for an additional decision of the Bank Board, and without any time or volume limits. The asymmetric nature of this exchange rate commitment, i.e. the willingness only to intervene against appreciation of the koruna below the announced level, is unchanged.

This decision is underpinned by a new macroeconomic forecast. Read full statement in English and Czech.

The Czech Finance Ministry forecast sees public finance deficit at 0.5% of GDP in 2017, 2018 and 2019, e15.cz server writes, adding that the total government debt should amount to 40.6% of GDP in 2016 and 39% in 2017. The Czech National Bank expects GDP growth in 2017 at 3.4%.