One more global currency has been set loose in free floating. The Czech National Bank allowed the koruna exchange rate to fluctuate in either direction.
Starting from 2013, the exchange rate of the Czech national currency has been under control, but this year the central bank decided to remove all restrictions. Until that, the CNB has been restraining the koruna from fluctuating by various types of currency interventions. However, the bank stopped interfering and allowed the Czech koruna exchange rate to float since April. While explaining its decision, the SNB said that the exchange rate of the national currency is able to withstand volatility surges on Forex without any interventions. At the same time, the CNB policymakers said that the bank can intervene again if necessary.
During last few years, the Czech National Bank was stubbornly trying to overcome deflation, keeping the exchange rate at 27 korunas per dollar. According to analysts’ estimates, the Czech Republic has spent almost 48 billion of euros on currency interventions during four years.
