IMF Staff Country Reports

Czech Republic: Selected Issues

June 26, 2017

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Czech Republic: Selected Issues, (USA: International Monetary Fund, 2017) accessed December 23, 2024

Summary

This Selected Issues paper analyzes the Czech Republic’s monetary policy after removal of the exchange rate floor. The koruna-euro exchange rate floor, which had been in place for more than three years, was eliminated in the beginning of the second quarter of 2017. Exit poses a number of challenging policy questions, including on the optimal monetary policy in its aftermath. The simulations indicate that a monetary policy response that is ex-post too loose is likely to be less costly than a monetary policy response that is ex-post too tight. This suggests that a gradual approach to interest rate increases is advisable.

Subject: Exchange rate pass-through, Exchange rates, Foreign exchange, Inflation, Output gap, Prices, Production, Real exchange rates

Keywords: Cost-push pass-through, CR, Exchange rate, Exchange rate appreciation, Exchange rate pass-through, Exchange rates, Global, Inflation, Inflation expectation, Inflation objective, Inflation target band, Interest rate, ISCR, Monetary policy, Monetary policy response, Output gap, Output gap volatility, Real exchange rates, Rule equation, Trend exchange rate path

Publication Details

  • Pages:

    17

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Country Report No. 2017/169

  • Stock No:

    1CZEEA2017002

  • ISBN:

    9781484305263

  • ISSN:

    1934-7685