The Czech koruna gained today on hopes that the central bank will intervene to support the declining currency and spur inflation. The central bank left interest rates near zero at yesterday’s meeting.
The Czech National Bank kept its main interest rate at the technical zero (0.05 percent) yesterday. With near-zero borrowing costs, the bank has no room for rate cuts and may resort to intervention to prevent further depreciation of the currency and inflation deceleration. Indeed the CNB said:
The likelihood of launching foreign exchange interventions to ease monetary policy has increased further.
USD/CZK fell from 19.6860 to 19.6775 as of 23:24 GMT today.
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Czech Koruna Rises on Hopes for Intervention from Central Bank
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