Central European Daily

While the Czech koruna weakened and hit an 11-day low, the Polish zloty extended previous gains and reached a 19-day high on Wednesday.

With respect to the koruna, a recent presentation (available on the CNB website) delivered by Lubomir Lizal, a member of the Czech National Bank’s (CNB) board, might have played a role. The presentation supports our view that Mr. Lizal ranks among three (out of seven in total) CNB board members who have been consistently voting for interventions against the koruna. The document contains a thorough defense (leaning on several recent working papers) of the tool under current conditions of interest rates set close to zero. In his concluding remarks, Mr. Lizal argues that FX shocks may have several times stronger impact on the economy (and prices) than in “normal” times.