Czech National Bank Keeping 27 CZK/EUR Exchange Rate for 2017
Czech National Bank unlikely to exit from EUR/CZK floor
The CNB still has no alternatives to regular interventions in the foreign exchange market to support the 27.00 CZK/EUR level.
In May the Czech National Bank acquired EUR 575 million for this reason, bringing the total to 12.7 billion EUR considering period from July 2015. Even a minimum decline in EUR/CZK by a general 4-5 percent after the floor was removed would result in the negative interest rates on the level of -0.10 to -0.15 percent.
Latest (18 July 2016): EUR 1 = CZK 27.024 -0.016 (-0.1%)
“Our base-case is that CNB will retain the EUR/CZK floor at 27.00 through end-2017 as a necessary supportive measure,” added Commerzbank in a recent research report.
Environment Ministry approves plan against drought
On Tuesday, July 12th, Environment Minister Richard Brabec promised investments of 300 million CZK for helping municipalities to find new sources of drinking water across the country.
The aim of the project is to ensure sufficient amount of drinking water for the people of the Czech Republic in future years.
“Last year saw the driest summer in more than a decade, the amount of precipitation was only 150 millimeters, while the long-term average is 650 millimeters.”
Many of the Czech Republic’s towns and villages had to fight the lack of drinking water by taking special measures.
Earlier this year, the ministry had already approved to earmark over one billion crowns to South Moravia, the most affected by drought region.
Econotimes 2016: http://www.econotimes.com/Czech-National-Bank-unlikely-to-exit-from-EUR-CZK-floor-235154
Radio.cz 2016: http://www.radio.cz/en/section/business/environment-ministry-approves-plan-against-drought
ECB 2016: https://www.ecb.europa.eu/stats/exchange/eurofxref/html/eurofxref-graph-czk.en.html