The IMF mission concluded its visit with an unusually strong warning that the public budgets threaten economy's outlook. Radical steps are needed to curtail ballooning deficits… We are happy to agree, our analysis from May 1999 shows exactly how bad the public budgets really are in the Czech Republic. So it is pleasing to hear the finance minister to admit that the deficit has become an issue. Better late than never!
The CNB's governor meets President Havel today to discuss his future at the central bank. Although Mr. Tosovsky is notoriously risk-averse, his resignation cannot be excluded as the President may feel let down by Mr. Tosovsky publicly aired desire to leave the CNB and join the EBRD.
The Czech koruna remained flat yesterday at 34.82 CZK/EUR and 41.35 CZK/USD.
Bonds were rather stable as well, longer gained slightly, 5-year state bond shed 15 bps.
(Ondrej Schneider)