Czech National Bank keeps interest rates, exchange rate unchanged

By Tali Rackner

Norfolk, Va., Sept. 24 – The board of the Czech National Bank decided at its Thursday meeting to maintain its two-week repo rate at 0.05%, the discount rate at 0.05% and the Lombard rate at 0.25%, according to a press release.

The board also decided to continue using the exchange rate as an additional instrument for easing the monetary conditions and confirmed the bank’s commitment to intervene on the foreign exchange market if needed to weaken the koruna so that the exchange rate of the koruna against the euro is kept close to CZK 27 per euro.

This exchange rate commitment is one-sided. This means that CNB Bank will not allow the koruna to appreciate to levels it would no longer be possible to interpret as “close to CZK 27 per euro.”

If the exchange rate departs from the exchange rate on the weaker side, the bank allows the koruna exchange rate to move according to supply and demand on the foreign exchange market, the release said.

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