The Czech koruna rose today even after the Czech National Bank kept its two-week repurchase rate unchanged yesterday on concerns that the global economic slowdown will hurt demand for nation’s exports.
The Czech central bank maintained its key interest rate at 0.75 percent. Six members of the bank’s board voted in favor of this decision, while one voted to increase the rate by 25 basis points. The central bank predicted that market interest rate will be stable in the near future.
The Czech export-driven economy has suffered from the global economic slowdown. Gross domestic product fell 0.1 percent in the fourth quarter of 2011, showing the same rate of decline as in the previous three months. Bank’s Governor Miroslav Singer explained that:
There is slowing foreign demand, expected fiscal consolidation here and elsewhere and stagnating economy.
USD/CZK fell from 18.5902 to 18.5765 as of 00:18 GMT today, following the advance to 18.6525. EUR/CZK was down from 24.8110 to 24.7360.
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