Published:01.09.2023
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Czech National Bank governor supports a different strategy from earlier monetary policy

The new board responded to high inflation by stabilising rates at 7% and pursuing a strong crown strategy to make imports of expensive raw materials cheaper.

The Czech Republic must not repeat 2017, when the volume of liquidity in the banking system was significantly increased in order to weaken the koruna and trigger inflation. Czech National Bank
Governor Aleš Michl wrote this on the Czech National Bank's website after returning from a conference of central bankers in Jackson Hole, Wyoming. He indirectly criticised the previous central bank management. He added that a year ago, the new board faced inflation of 18%. It responded by stabilising rates at 7% and pursuing a strong crown strategy. There was a need to make imports of expensive raw materials cheaper. At the same time, the strong koruna tightened monetary conditions for large companies, which had not been affected by the CNB's high rates because they had taken out loans in euros. Since then, inflation has fallen to 8.8% (July this year).

Source: Daily news | ČIA news
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