The Czech Republic doesn’t face a deflation threat that would require the first koruna sales in a decade to stimulate the recession-hit economy, central banker Pavel Rezabek said, underscoring a split among policy makers. Interventions should be used only in extraordinary situations and, if conducted, the primary goal would be to “solve a deflation problem,” he said. Note, the crown fell yesterday to CZK 25,93/ eur and CZK 19,92/USD The Czech Republic doesn’t face a deflation threat that would require the first koruna sales in a decade to stimulate the recession-hit economy, central banker Pavel Rezabek said, underscoring a split among policy makers. Interventions should be used only in extraordinary situations and, if conducted, the primary goal would be to “solve a deflation problem,” he said. Note, the crown fell yesterday to CZK 25,93/ eur and CZK 19,92/USD.
Eva Zamrazilova of the CNB board told Reuters that the CR’s longest recession in two decades has probably bottomed out and that there are signs that the economy is turning around. She said that there are some stabilization elements apparent, such as a halt in the fall of property prices mainly in Prague and signs of a possible revival of the property market. The CNB recently lowered its GDP growth forecast for this year from -0.2% to -0.3%.