PRAGUE: The Czech central bank kept its weak-crown policy unchanged on Thursday as expected, as the market is looking for guidance for the timing of an end of the cap on the exchange rate strength.
Governor Jiri Rusnok will comment on the decision at a news conference at 2.15 p.m. (1315 GMT).
He will also present a quarterly update to the bank's economic outlook.
The bank has used market interventions to prevent the crown from strengthening beyond the level of 27 crowns per euro since November 2013, after cutting interest rates almost to zero one year earlier, with the aim to help revive inflation.
The bank has pledged not to scrap the weak-crown policy before the end of the first quarter, and has repeatedly pointed to mid-2017 as the likely exit timing.
Analysts expect the bank will scrap the cap already in the second quarter, according to a Reuters poll, as inflation rises and investors pile into crown markets, forcing the bank to intervene heavily to defend the 27 level.
The central bank's balance sheet for Jan. 1-20 showed receivables from abroad jumped by 358.5 billion crowns, or 13.3 billion euros, indicating sizeable market interventions early in the month.
The bank had bought a total of 13.6 billion euros from the market between January and November last year.
Czech annual inflation has reached the central bank's 2-percent target in December for the first time in four years.
The central bank has repeatedly said it wants to see inflation meeting the target in a sustainable way before ending the cap on the crown.
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