The Czech economy faces several years of low growth and inflation will fall to low levels within months, Czech central bank Vice-Governor Miroslav Singer was on Friday quoted as saying.
The Czech central bank governor rejected fast euro adoption as a shield against the financial crisis on Thursday, while his Polish counterpart cast doubt on the government’s 2012 euro zone entry plans due to the turmoil.Their statements highlighted the divergent stances toward the single currency in central and eastern Europe’s EU newcomers as they struggle to deal with the fallout of the global turmoil, following a month of crisis in Hungary.
In view of the global financial crisis, Czech savers are withdrawing their assets from mutual funds, which are considered relatively risky, and moving them to secured funds, time deposits, and building societies.
Although the confidence in the Czech economy decreased in October, Czech banks remain trusted. The three largest banks – ČSOB, Česká spořitelna and Komerční banka – say that no large-scale cash withdrawals are taking place.
Czech President Václav Klaus says in an e-mail interview for Aktuálně.cz that western politicians failed to foresee the global financial crisis because they were preoccupied with global warming.
Tension on the Czech money market has eased over the past week and market-making on the bond market could resume soon, central bank Vice-Governor Miroslav Singer said on Wednesday.
The Czech banking system is sound and the economy is healthier than its Hungarian counterpart, but the country is still at risk of contagion from the global financial crisis, according toZdenek Tuma, the governor of the Czech central bank.
Interbank money loans among Czech banks have become much more expensive and are provided for only very short time periods. Decreased trust and cash at its highest value – that is what the Czech banking market looks like these days. Everyone wants to have as much cash in their balance as possible. That is what bankers told HN in an anonymous poll. To get a loan for longer than one day is basically impossible in the Czech Republic. Also the rate for money loans has been increasing. While before the crisis, banks loaned to one another at official interbank rate – the so-called Pribor – now they loan money for Pribor plus extra money. Moreover, these rates have jumped significantly.
The global financial crisis, which has been crushing banks all over the world, has directly hit a Czech bank for the first time. The Belgian KBC, ČSOB’s parent company, announced Wednesday it is expecting nearly EUR 1 billion losses in the third quarter of this year. The reason for the losses is the overvaluation of securities that the company, including ČSOB, bought. The investment problems will quickly lower ČSOB’s expected profit by CZK 6.2 billion. Spokesman Ivo Měšťánek said if it weren’t for the investement problems, the bank’s revenues would have totalled CZK 8.9 billion in the first three quarters. Now it will be only CZK 2.7 billion. He said the overvaluation of securities will not have any impact on
The Finance Ministry does not plan to issue any state bonds in the coming weeks except for an eight-year floating rate note due to be auctioned on 22 October, Deputy Minister Eduard Janota said on Wednesday.