Evolution of the Czech National Bank's Holdings of Foreign Exchange Reserves
12 Pages Posted: 7 Oct 2014
Date Written: August 2014
A central bank may decide to conduct foreign exchange interventions when it concludes that the exchange rate level without such interventions would be insufficiently strong. A by-product of such interventions will then be a build-up of official foreign exchange (FX) reserves. A case in point is the evolution, since the late 1990s, of the official FX reserves held by the Czech National Bank (CNB). In this paper, we take a closer look at this particular case, focusing specifically on the interventions that the CNB conducted in late 2013. We also examine some less traditional ways in which the CNB’s activities have directly or indirectly affected the Czech koruna exchange market over the past dozen years.
Keywords: Appreciation, economic convergence, foreign exchange intervention, international reserves, privatisation
JEL Classification: E52, F31, F41, O24
Suggested Citation: Suggested Citation