Czech President Urges End to Currency Cap
- New Europe Investor
- August 14, 2015
The President of the Czech Republic, Milos Zeman, has urged the country’s central bank to put an end to the currency cap keeping the currency artificially weak to the euro.
The president has support from the heads of both houses of parliament. The chairman of the Senate, Milan Stech, stated this week that the policy is hurting Czech citizens.
The Koruna has been set at 27 to the euro since 2013. The central bank in Czech has recently had to intervene to weaken the currency due to a more than 2% increase in its value since the beginning of the year.
The central bank is also trying to stave off imported deflation from other European countries, and has insisted that it will continue to intervene to keep the currency at its current value until well into 2016.
The weak currency has contributed to growing exports in Czech. However, this rise in exports has put pressure on the currency itself.