Czech Central Bank Zeros In on Ending Koruna Cap in Mid-2017
- Bank pledges to maintain koruna limit until at least April
- Board members say policy change likely in middle of next year
The Czech central bank signaled stronger confidence about when it will scrap its limit on currency gains, as policy makers narrowed the expected window to return to conventional monetary policy in around the middle of next year.
The Czech National Bank kept the benchmark rate at the “technical zero” of 0.05 percent on Thursday and confirmed its cap on the koruna exchange rate at around 27 per euro. It also prolonged its formal pledge to prevent the currency from appreciating beyond that level by three months, until at least April. Governor Jiri Rusnok reaffirmed the board’s view that the exit from the currency regime was likely around mid-2017, and said there was a “minimal” risk of postponing the policy shift after several delays in the past three years.