Wednesday, April 9, 2008

Forex - Czech crown weakens on news govt approves deal to curb currency growth

PRAGUE (Thomson Financial) - The Czech crown weakened in midday trade after news the government had approved a finance ministry and central deal meant to curb the currency's gains.

At 12 noon, the crown was 0.3 percent weaker against the euro at 25.1, gaining some after losing as much as 0.5 percent in earlier trade.

The ministry and central bank's deal includes freezing all privatisation income and not converting it into the Czech currency, as well as not converting European Union subsidies, however final details will be known later today.

"The deal has been approved," a central bank spokeswoman said, adding that final details will be released at an afternoon press conference from the finance ministry.

The measures are expected to keep major fund flows outside the market without effecting the exchange rate and demand for the crown.

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