The koruna weakens slightly, the ČNB is likely to intervene

The koruna is trading at around CZK 25.85/EUR on Monday morning, roughly 15 cents weaker than on Friday evening. However, according to some economists, the exchange rate development shows that the Czech National Bank seems to be continuing its interventions against the koruna depreciation, which it announced on Friday.

Seidler, the chief economist at the Czech Banking Association, pointed out that the weakening of the koruna by less than six percent is worse in this respect, which is also due to the presence of the ČNB on the market, which prevents the koruna from weakening significantly.

The ČNB said on its website on Friday that it was carrying out operations to dampen excessive exchange rate fluctuations and the weakening of the koruna.

“The ČNB has high foreign exchange reserves in international comparison, the use of which is an exceptional situation such as the one we are currently in is fully justified,” it said.

The bank would not disclose further information on the operations mentioned. Analysts said the central bank is unlikely to let the Czech currency weaken to or above the 26 koruna per euro level.