A new quarrel around the Czech central bank arose. The cabinet is said to try to block the naming of Tůma as CNB Governor and Niedermayer as Vice-Governor. The cabinet besieges that the naming has to be accompanied by the countersignature of the Prime minister. However, President’s experts disagree with such an explanation of the constitution.
The cabinet is likely to approve a keeping the state mortgage interest rate subsidy at the current level of 4%. Under the current rules, the subsidy should be lowered to 2% next year.
The Czech koruna was stable during yesterday’s trading. The FX market is likely to say frozen until the CNB board meeting. Late on Tuesday, the koruna stood at 34.44 to the euro from 34.50 on Monday. Pulled by firming euro, the CZK/USD exchange rate firmed to 40.23 yesterday form Monday’s 40.64.
Bonds were very quiet again on Tuesday. However, with no major action during the day, the prices ended up a fraction lower than on previous day. As the end of the year is approaching, such quiet days will become normal, if it is not already the case. There is still one more government bond auction to be held, which might make the market to get bit busy for some while.
Current benchmark prices: MoF 6.75/05 98.70-00 (unchanged), MoF 6.30/07 93.40-70 (-5 bps), MoF 6.40/10 91.35-65 (-5 bps).