Monetary policy of the Czech National Bank - Currency interventions against EURO and its impact on the Czech economy

Adam Hrubec

Master's thesis

Abstract:

The focus of this diploma thesis is on the monetary policy of the Czech national bank and the measures it takes to sustain the price stability and long term economic growth in the national economy. Special attention is given to the foreign exchange interventions against EURO currency that the Czech national bank introduced at the end of year 2013 in order to fight against the threat of deflation pressures. This thesis, among others, analyses the impact of those interventions on the Czech economy.This diploma thesis is divided into two main parts. Theoretical part focuses on the general role of the national bank in the economy and the monetary policy instruments it uses to ensure price stability and economic growth along with theoretical economic effect of those instruments. At the end of the theoretical part, this thesis analyses the theory of exchange rates and deflation.Practical part of this thesis analyses the real impact of the foreign exchange interventions on the main macroeconomic indicators in the Czech economy.

Keywords

Foreign exchange market, Inflation, Exchange rate, Export, Import, Balance of payment, National Bank, Deflation, Depreciation, Monetary policy

Language used: English

Date on which the thesis was submitted / produced: 18. 4. 2016

Thesis defence

• Supervisor: doc. Ing. Mansoor Maitah, Ph.D. Ph.D.

Czech University of Life Sciences Prague

Faculty of Economics and Management

Master programme / field:
Economics Policy and Administration / Business Administration