February 24, 2014 / 12:46 PM / in 4 years

Czech c.banker says crown will not return to pre-intervention levels

PRAGUE, Feb 24 (Reuters) - There is no reason to expect the Czech crown’s exchange rate will return to levels seen before the central bank intervened to weaken the currency last November even after a return to standard monetary policy, Vice-Governor Vladimir Tomsik said on Monday.

He reiterated the bank’s forecast did not see end of the bank’s pledge to keep the crown form firming past around 27 per euro before the beginning of 2015.

Policy will change only when the bank is sure that the domestic price environment secures the economy far from the threat of deflation, he said in a blog post on the bank’s website.

“Even then there is no reason to expect the exchange rate to firm to the level before the launch of the (central bank) interventions, because, in the meantime, the weaker exchange rate of the crown will filter into the price level, wages and other nominal variables,” he said. (Reporting by Jan Lopatka; Editing by Jason Hovet)

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