Czech Republic: Selected Issues
Electronic Access:
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Summary:
This Selected Issues paper analyzes the Czech Republic’s monetary policy after removal of the exchange rate floor. The koruna-euro exchange rate floor, which had been in place for more than three years, was eliminated in the beginning of the second quarter of 2017. Exit poses a number of challenging policy questions, including on the optimal monetary policy in its aftermath. The simulations indicate that a monetary policy response that is ex-post too loose is likely to be less costly than a monetary policy response that is ex-post too tight. This suggests that a gradual approach to interest rate increases is advisable.
Series:
Country Report No. 2017/169
Subject:
Exchange rate pass-through Exchange rates Foreign exchange Inflation Output gap Prices Production Real exchange rates
English
Publication Date:
June 26, 2017
ISBN/ISSN:
9781484305263/1934-7685
Stock No:
1CZEEA2017002
Pages:
17
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