Czech Prime Minister Milos Zeman rejected a call from Cuba on Friday to admit wrongdoing in a diplomatic row over two Czechs jailed in Havana for meeting anti-government dissidents. Fidel Castro's government has held ex-finance minister Ivan Pilip and former student leader Jan Bubenik in jail since January 12 for alleged "subversive contacts" with members of Cuba's unofficial opposition, and has threatened to put them on trial.
The four-party coalition unexpectedly chose Cyril Svoboda as an election leader. No one of final candidates, Karel Kühnl, Michael Žantovský and Jaroslav Kopřiva, was acceptable to all parties.
ODS called for Finance Minister Mertlík to leave the cabinet and said it will boycott his proposal in Parliament if he does not leave. The reason is a problematic sell of IPB Bank to ČSOB. ČSOB announced a claim for CZK 180 billion guarantee for IPB assets.
The koruna edged higher to 34.79/85 to the euro from the morning's 34.81/84 and 34.84/87 late on Thursday. Koruna/dollar was at 37.79/82 from 37.55/59 in the morning and from 37.95/96 late on Thursday.
After its monetary policy meeting yesterday, the Czech National Bank reduced its inflation outlook on lower oil prices and a stronger currency. The bank also said it discussed chances of a cut in the key two-week repurchase rate. That surprised investors who expected the bank to keep the rate unchanged until at least the second half of the year. The bank left the rate at 5.25 percent, keeping it at a historic low for more than a year. Late on Friday, the state bond 6.40/10 traded off morning levels but still 130 points up form Thursday at 98.60/90, yielding 6.60/56 percent from 6.80/75. The state bond 6.75/05 was up 60 basis points at 102.05/35, yielding 6.16/07 percent form 6.33/24.
(David Marek)