Nomination of new NB governor aroused fears on the market, koruna jumps weakened | Business

Czech koruna in response to public names new governor esk nrodn bank Alee Michla sharply lost. The euro surpassed the level of 25.23 crowns per euro, in the immediate reaction so more than one percent. In ter, the exchange rate was 25 crowns per euro. XTB analyst Ji Tyleek is walking through a similarly strong decline on the US dollar.

According to him, the koruna will record a little loss to other Central European currencies. According to Tylek, Michl has voted against all eight rates since June last year. Investors are fighting that the central bank will grow sharply in the further growth of rates. I am so worried about Michlv’s unconventional view of the implementation of policy changes, which he has presented several times in recent years, he added.

How specifically the policy of the NB will look first in the direction of the annual rates to go will be affected by the name of the other banks of the council, which this year mandates. If Michl remained with his opinion on the years of the rate, he could easily be overruled by other members.

Uncertainty about the form of the new darkness and the new consensus on the new policy of Petrv. If the Bank Board actually explicitly excludes further growth in annual rates, it could be honored at the current high inflation rates in Czech crowns. The NB is becoming a two-way partner for the markets, warns Jan Bure, chief economist at Patria Finance.

The NB will probably have to intervene

We assume that in the event of a sharp sale to the koruna, NB will close and will intervene in the market by selling foreign exchange reserves. We consider the exchange rate to be over 26 crowns per euro to be unlikely, Bure assured.

According to Miroslav Novek, an analyst at Akcenta, given the sharp rise in consumer inflation, the rapid weakening of the koruna is extremely unfavorable for the bank board. It cannot be ruled out that the NB will have to intervene in exchange rate stabilization, as was the case at last year’s arrest, Novk said.

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