Final Word from Monday, May 16, 2022
The Czech National Bank is so bad at economic forecasting that one must wonder whether it is intentionally bad. If it took a more realistic view of the domestic, European and global economic situation, its monetary policy would benefit the economy more, but it's four-year campaign to revalue the crown would suffer. A realistic view today is that the Czech economy is an express train that was moving along at a 4.6% speed in the first quarter (from a low base) and that is starting to decelerate. The engine driver has a schedule to keep but knows that if he isn't careful, he might derail and hit a bridge pillar or other obstacle. CNB Gov. Jiří Rusnok acknowledged at the May 5 monetary-policy meeting that a halt in supplies of Russian oil and natural gas would have "very dramatic consequences" for Europe, but he still supported a sharp increase in interest rates. The risk of Rusnok's policy is that if the derailment comes, the damage to companies and households will be all that much greater. [ Czech Republic devaluation revaluation ]
Glossary of difficult words
to revalue - the opposite of devalue; to make an adjustment to the value of a currency in relation to other currencies;
to decelerate - to reduce or cause to reduce in speed;
to derail - (of a train or tram) accidentally to leave the tracks; to cause (a train or tram) to leave its tracks accidentally;
pillar - a tall vertical structure of stone, wood, or metal, used as a support for a building or other structure, or as an ornament or monument.