PRAGUE Oct 4 The Czech central bank should
avoid sudden shifts in its policy of keeping the crown currency
weak and ensure it does not shock the economy when it eventually
exits the intervention regime next year, Industry Minister Jan
The bank has kept the crown on the weak side of 27 to the
euro since 2013 and last week shifted the earliest possible end
to the policy until the second quarter of next year while
reiterating it expected to refloat the crown in mid-2017.
"A sudden change in the currency regime can threaten many
firms," Mladek was quoted by daily Hospodarske Noviny as saying
at an industry conference.
"It will be necessary to start the exit of interventions in
a way that will not cause unnecessary shocks to the economy," he
added in the article published on Tuesday
The weak crown policy, launched to lift inflation in the
central European country, has given a boost to businesses and
the economy, which is expected to grow more than 2 percent in
2016 before accelerating next year.
In 2015, the economy grew 4.6 percent, one of the fastest
rates in the European Union thanks to an influx of development
funds due to the end of a fund period.
Some businesses have worried about the impact once the crown
is floating freely again.
The central bank has said repeatedly it would be ready to
tame any currency swings once the weak crown policy finished.
It reiterated after its policy meeting on Sept. 29 that the
crown would not strengthen sharply upon exit, due to pre-hedging
by exporters, closing of long-crown positions and more central
bank interventions if needed.
(Reporting by Jason Hovet)