- Chief health inspector Michal Vit told journalists after a meeting of the central emergency committee that not a single case of anthrax has been recorded in the Czech Republic. The committee members decided to create as a preventive step a working group in charge of biological protection that will focus on possible dangers of attack by biological weapons and propose measures to be taken against them. The group will be headed by the chief health inspector and will comprise of employees of the Health Ministry, the State Authority for Nuclear Safety, the army medical service and the Main Veterinary Authority. The group will submit materials to the central emergency committee and if necessary, propose that the committee meet.
- Both import and export prices dropped month-on-month in August, by 0.4 % and 0.2 %, respectively. The largest decreases were observed at mineral fuels and related materials: -2.9 % in imports and -2.2 % in exports. Prices of the most important item by volume, machinery and transport equipment, either remained at their July level (imports) or dropped slightly (by 0.2 % at exports). Price growth was recorded only for food (by 1.1 %) and manufactured goods (by 0.5 %) on the import side and for crude materials (by 0.8 %) and manufactured consumer goods (by 0.3 %) on the export side. In year-on-year terms, August was the fourth month in a row witnessing a drop in import prices (this time by 2.2%). Prices of imported mineral fuels and of crude materials dropped most, by 7.0 % and 6.0 %, respectively; import prices of machinery and transport equipment fell 1.6 %. As an exception, import prices of food rose 5.3 % and those of beverages and tobacco added 0.8 %. Export prices dropped for the first time since 1999, by 0.4 %, with the biggest price decreases measured at crude materials (-9.5 %) and chemicals and related products (-7.3 %). Export prices of machinery and transport equipment dipped 1.0 %. Year-on-year terms of trade reached 101.8 in August, following 101.0 in July.
- The Chamber of Deputies put off voting on the state budget bill for 2002 in the first reading till Thursday afternoon. On Tuesday, the budget committee proposed to the Chamber not to pass the budget.
- Deputy Finance Minister Ladislav Zelinka confirmed that the Czech Republic and Russia have not yet reached agreement on whether or not to establish a fund that would support Czech exporters to Russia. The fund should become part of the settlement of Russia's debt to the Czech Republic. Russia would not pay USD 300m of the debt directly, but it would deposit the money in a guarantee fund, which would raise the capacity of the Czech Export Guarantee and Insurance Company (EGAP). By estimate, the fund should suffice for the insurance of at least USD 1.2bn worth of exports. The agreement on the fund’s establishment has to pass through a difficult approval process in Russia and “there is a faction in the Russian parliament which claims that the debt of the former Soviet Union should not be paid at all," Zelinka added.
- The Industry and Trade Ministry said that the European Commission did not reject the submitted restructuring program for Czech steel industry but only required some explanation. According to the Ministry, the Czech Republic will clarify some of the unclear items in Brussels next week. On a related note, the Ministry of Industry and Trade and the Finance Ministry announced that they would propose the firm Roland Berger to the government as the adviser for the prepared privatization of the Czech steel industry.
- The Czech crown had opened at the same level vis-a-vis the euro as yesterday, 33.46 CZK/EUR. Trading was calm most of the day with the crown moving within a narrow range 33.44 to 33.48 CZK/EUR. Against the dollar, the crown opened at 36.88 and then was weakening up to 37.10 CZK/USD until the warning news arrived from the US Senate and Alan Greenspan in the afternoon. Late in the afternoon, CZK/EUR was trading at 33.48/51, unchanged from its level on Tuesday. CZK/USD closed at 36.95/97, down from late Tuesday’s 36.81/83.
- Bond prices slightly rose also on Wednesday. The longest state 6.95/16 benchmark added 5bps to 107.85/15, yielding 6.11/08 %. The state 6.75/05 bond rose by 10bps to 103.70/95, yielding 5.49/41 %.
|Late on October 17|| bond yield ||Late on October 16|
| State 6.75/05||103.70/95||5.49/41||103.60/85|
| State 6.95/16||107.85/15||6.11/08||107.80/10|