‘Czexit’ Looms As Traders Bet On Czech Republic Breaking Euro-Peg
by Tyler Durden
Jan 11, 2017
Czech inflation spiked in the last two months, hitting the central bank’s target for the first time since 2012, heaping, as The FT reports, additional pressure on the country’s soon to be expired currency regime with the euro.
Along with on-target inflation, the Czech Republic also boasts the lowest rates of unemployment anywhere in the EU at 3.7 per cent.
Having kept an upper limit on the koruna in a bid to control inflation over the last three years, the central bank has been forced to buy up foreign currency at a faster pace to keep the regime steady. The koruna has been kept at around CZK27 against the euro since 2013, but policymakers have warned they are likely to scrap the regime at some point this year.
So Is a ‘Czexit’ on the cards?