19th February 2015

President’s influence on CNB and on CZK exchange rate

During his visit of Region of Hradec Králové on Wendnesday 18th February President Miloš Zeman further criticised Czech National Bank’s decision to intervene to keep CZK under the exchange rate of 27 CZK to EUR. Further adding to this matter President Miloš Zeman said that with his power to appoint members of the Czech National Bank Board of Governors he would appoint only those bankers that would be in favour of Czech accession to European Single Currency. In reaction to this statement CZK appreciated in the following hours and days up to the value of 27.20 CZK for 1 EUR. This triggered the speculation whether CNB would hae to intervene again in order to keep CZK under the limit of 27 CZK. UniCredit economist Pavel Sobíšek commented President’s statement as having various potentially unwanted side effects including the rapid appreciation of CZK or potential change of behaviour of some potential candidates for the 4 seats of CNB Board that remain to be changed during current president’s electoral period to be more to his liking.

For click here and here.

Members of the American Chamber of Commerce in the Czech Republic