Czech crown was released to free float
During today's extraordinary meeting, the Czech National Bank has canceled the growth limit of the national currency rate, which operated for the past three years. This decision reflected on the CNB confidence that the crown is able to withstand the currency fluctuations, and the threat of excessive deflation has passed.
In 2013, the Czech Central Bank has introduced a limit growth of the national currency, according to which the crown couldn't gain a foothold above 27 units for one euro. The purpose of this was an acceleration of inflation in the country. For the last four years, the Czech Central Bank within the excessive crone strengthening prevention bought currency for a total amount of 47.8 billion euro.
Recently, the inflation acceleration observed in many Eastern and Central Europe countries, and the Central Banks reactions to this phenomenon are ambiguous. The Hungary Central Bank prefers to stick to the monetary easing policy, leaving the interest rate unchanged, and Poland is betting on the monetary policy stabilization in the nearest future.