Czech Republic

‘An order from on high: one Euro for 27 crowns’

Published on 8 November 2013 at 12:09


For the first time since 2002 the Czech National Bank (ČNB) has intervened on the foreign exchange market to devalue the national currency in order to stimulate exports, the main engine of the country's economy, and boost inflation, which is considered to be too low.
"Within 30 minutes the euro had gone up by one crown and almost reached the exchange rate dictated by the Central Bank. Such a rapid drop in the crown is unprecedented in this millennium," writes Hospodářské noviny.
This is a "logical outcome", explains the journal, as the country is up against "an economy that is failing to emerge from a cycle of moderate slumps and even more moderate growth."
For the economic daily, the approach of the ČNB, qualified as "an entry into a global currency war", is "not a bad idea at a time when no other options are open. But it is not clear what the bank will do if everything doesn’t go as expected."

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