Final Word from Monday, November 7, 2022



On the eve yesterday of the ninth anniversary of the Great Devaluation of the Czech Crown on Nov. 7, 2013, ex-CNB Gov. Jiří "Revaluation" Rusnok openly criticized the interest-rate and intervention policy of his successor, Aleš Michl. The CNB is keeping the crown at around Kč 24.70/euro by selling euros instead of raising interest rates, and Rusnok said (at 13h25m) that if this continues for a long period, it means we're entering a new currency regime. He left it at that, but what this means is that the CNB could quietly be moving from a "free-floating" arrangement to what the IMF refers to as a "managed" arrangement, which the country also had during the 41 months of the devaluation. By law, the CNB must confer with the cabinet before stipulating a new exchange-rate regime. There is no public evidence that Michl did this. But then neither did Rusnok when he went off the "managed" regime on April 6, 2017. And neither did Miroslav Singer, when he devalued the crown nine years ago today. [ Czech Republic Annual Report on Exchange Arrangements and Exchange Restrictions International Monetary Fund VŘSR VDČK ]

Glossary of difficult words


to float - (of a currency) to fluctuate freely in value in accordance with supply and demand in the financial markets;

to leave it at that - to abstain from further comment or action;

to confer - to have discussions.

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