Czech Republic: Selected Issues

Publication Date:

June 26, 2017

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:

English

Publication Date:

June 26, 2017

ISBN/ISSN:

9781484305263/1934-7685

Stock No:

1CZEEA2017002

Pages:

17

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