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Analysis of impacts using the non-conventional instruments of the ČNB monetary policy in the period 2013-2016 on stability of the czech economy
Miňhová, Kristýna ; Pekárek, Štěpán (advisor) ; Bednář, Milan (referee)
In reaction on existence of economic cycles, the period of economic growth is changed with the economic recession, which can grow in the crisis eventually. In such a case, the task of economic policy is to direct the economy in the right direction, back to the boom. The thesis focuses on monetary policy and its ability to achieve this task. The aim of the thesis is to analyze the influence of foreign exchange interventions used in the period of 2013-2017 on the restoration of financial and (macro)economic stability of the Czech Republic. For this purpose, time series of indices describing the stability, the financial stress index and the economic stress index are constructed. A comparative analysis proves that the financial and (macro)economic situation in the Czech Republic has started to stabilize shortly before the unilateral exchange rate commitment to the euro and the impact of foreign exchange interventions cannot be certainly confirmed.
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Foreign exchange reserves and their influence on performance of Czech National Bank
Sýkora, Tomáš ; Koderová, Jitka (advisor) ; Šíma, Ondřej (referee)
This bachelor's thesis focuses on foreign exchange reserves, which are closely related to performance of central bank, namely Czech National Bank. Theoretical part sketches out general concept of foreign exchange reserves and how to understand them in a balance sheet. Additionally, it shows their purpose in foreign exchange rate systems which are more detailed described bellow and what influence they have on performance of national bank. Practical part shows a development of foreign exchange reserves of Czech National Bank since 1993. First, due to fixed foreign exchange rate and then since 2013 due to intervention of Czech National Bank, it accumulated a huge amount of foreign exchange reserves in its balance sheet. That was the cause of open foreign exchange position. The thesis analyses the relation between foreign exchange reserves and performance of Czech National Bank, which hugely depends on revaluation differences of foreign exchange reserves. It also focuses on a dilemma, whether it truly is a problem for Czech National Bank to suffer a loss from expected appreciation of Czech Koruna after leaving the intervention obligation.
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Monetary policy at a time of low interest rates and threat of deflation
Kochergin, Aleksei ; Gevorgyan, Kristine (advisor) ; Šíma, Ondřej (referee)
The aim of the bachelor thesis is to analyze the Czech economy during the period of foreign exchange interventions, and several months after them in the situation of impending deflation. The topic is chosen to be the most up-to-date statement by the Czech National Bank council on the termination of the exchange rate commitment, which will undoubtedly define the domestic economy for a certain period of time. The thesis deals with aspects that have forced the Czech national bank to intervene in the foreign exchange market, it examines the state of the economy during the implementation period of the intervention, and then after the end of the exchange rate commitment. The work is divided into three main parts. The first part of this work explains the essence of monetary policy and its application by the central bank. The second part explains the economic nature of deflation and different views on this issue. The third part focuses on the analysis of the economic situation in the Czech Republic and the policy of the central bank. The result of this analysis will be the assessment of the success of selected strategy on the example of macroeconomic indicators and the evaluation of its adequacy due to the findings.
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Analysis of the impact of currency intervention on financial markets and analysis of speculative activity
Langr, Matěj ; Dvořák, Petr (advisor) ; Mazáček, David (referee)
Abstract Objective of this thesis is calculation of the speculative position that is held by the subjects of such speculation on appreciation of Czech currency. Thesis inspects the impacts of currency interventions on domestic financial spot and future markets. Thesis also describes development in the speculative capital inflow, which was conducted with support of quantitative and qualitative data extracted from ARAD database, which runs on Czech national bank domain. Calculation were also conducted by the author of this thesis using Bloomberg Terminal data. The results of this study shows that in total 68,2 billion EUR entered Czech financial market in the form of speculative capital, as well as detailed analysis of speculative capital inflow periods and speculative strategies through which the capital entered. It was also discovered that because of the speculative capital inflow, negative deposit interest rates occurred. Impacts on future/forward markets were discovered as well as impacts on spot markets. Thesis also describes the impact on hedging activity of domestic exporters in the period of exchange rate commitment. Also the impact on inter-bank markets were described with the impact on their balance sheet. Czech republic finds itself in the era of massive foreign exchange reserves, since Czech national bank was forced to buy out EUR liquidity, thus fulfilling exchange rate commitment
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Monetary policy of the Czech National Bank
Kotačka, David ; Rajl, Jiří (advisor) ; Cibulka, Jakub (referee)
This bachelor thesis is divided into two major parts. The first part is focused on the general theory of monetary policy which includes tools, targets and transmission machanisms. The aim of this part is to summarize information about process of monetary policy and to provide information for better understanding of the practical part. This part is focused on foreign exchange interventions used by Czech National Bank who was making an effort to accomplish the goals determined by law. The practical part is divided into two minor parts. The first of them is focused on analysis of economic indicators before, during and after foreign exchange interventions. The second part is focused on the development of EUR to CZK exchange rate which was deviated from real exchange rate.
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The most significant phases of the monetary policy of the Czech National Bank
Krahulcová, Iveta ; Koderová, Jitka (advisor) ; Revenda, Zbyněk (referee)
The diploma thesis deals with the analysis of the most significant phases of the monetary policy of the Czech National Bank, including the analysis and evaluation of its effectiveness from its origin to the present. The thesis is divided into three individual parts. Each part corresponds to a specific transmission mechanism applied by the Czech National Bank while implementing the monetary policy. Each chapter includes the assessment of the effectiveness of individual approaches and the analysis of the impact of the monetary policy as well as the decision of the Czech National Bank on the Czech economy. The very first chapter is focused on the application of the monetary transmission mechanism in conditions of the fixed exchange rate during which an increasing internal as well as external disequilibrium led to the monetary crisis. The second chapter is dedicated to the transition to the inflation targeting, expert discussion concerning its implementation and the evaluation of the achieved results. The last chapter presents the use of the CNB's additional instrument of the monetary policy in the form of the exchange rate including the reasons that led to this step. The closing part of this chapter focuses on the evaluation of the effectiveness of this policy.
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Analysis of deflationary factors in the Czech Republic in years 2008-2016. Was the CNB's decision to start intervene on foreign exchange markets well-founded?
Krampera, Tomáš ; Ševčíková, Michaela (advisor) ; Munzi, Tomáš (referee)
The decision of the Czech National Bank to initiate interventions on foreign exchange markets on 7th November 2013 based on an alleged threat of deflation induced a significant professional debate about the legitimacy of such a step as well as the phenomenon of deflation itself. The aim of this paper is to evaluate the development of Czech economy before and after the interventions using a macroeconomic and econometric analysis. That includes identifying potential deflationary factors, which are then put into context of good and bad deflation characteristics. Further analysis is to determine whether foreign exchange interventions were a justified step. This bachelor paper also mentions the characterization of different viewpoints on deflation, the evolution of opinions from a historical perspective and the description of low-inflation development abroad. The final part of this paper identified low inflation in Eurozone and the prices of oil as the main deflationary factors, both of which matching good and bad deflation characterization. I find CNBs foreign exchange interventions as an unfounded step.
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Effect of CNB's Monetary Intervention on Czech Exports to Germany
Krejčí, Tadeáš ; Šopov, Boril (advisor) ; Svačina, David (referee)
The primary interest of the thesis consists in impact of the Czech National Bank's monetary intervention on the volumes of Czech exports to Germany. To determine the significance of the potential casual effect, a Vector Autoregressive (VAR) model is constructed based on economic introspection and previous findings of other authors, to be subsequently estimated using the lucid method of least squares. Based on this procedure, we find evidence supporting the positive causal effect at hand. The results also confirm the presence of a structural break into periods before and after the initiation of controlled float regime. Furthermore, indications of casual effects are encountered in cases of other macroeconomic variables, such as German exports, supporting the reasoning in earlier works relating to this topic. JEL Classification E50, E51, E58, C51, C53 Keywords ForEx intervention, exports determination factors, foreign reserves, monetary policy Author's e-mail teddy.krejci@gmail.com Supervisor's e-mail boril.sopov@gmail.com
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Foreign-exchange interventions as an unconventional tool of monetary policy of the CNB: the Swiss National Bank and the Bank of Israel experience comparison
Poláková, Aneta ; Vejmělek, Jan (advisor) ; Šíma, Ondřej (referee)
This thesis deals with the use of foreign-exchange interventions as an unconventional tool of monetary policy in inflation targeting regime. It is primary focused on monetary policy of the Czech National Bank and foreign-exchange interventions that have been executed since November 2013. Further, it is devoted to interventions executed by the Swiss National Bank and the Bank of Israel. The main aim is to analyse the experience of previously mentioned central banks with foreign-exchange interventions, to describe main reasons and goals, and especially impacts of interventions on economies of related countries while focusing on inflation, GDP and unemployment. The last part provides the evaluation of referred intervention regimes and their comparison.
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Monetary Policy of the Czech Republic
Turková, Kateřina ; Toth, Daniel (advisor) ; Zdeněk, Zdeněk (referee)
The thesis is focused on the tools of monetary policy which the central bank uses when she wants to achieve the inflation target. The outcome of this thesis is proposal optimize the tools of monetary policy. The Proposal is based on the analysis of the results of simultaneous econometric model. In this thesis is testing time series by November 2013. At this time the Czech National Bank concluded currency commitment. By this time the central bank is overseeing that the exchange rate is above 27 CZK / EUR. Another objective is evaluating the influence of interventions on the economic development of the country. In this thesis are used secondary data from external sources. In the theoretical part is described of monetary policy, monetary policy instruments and the main objectives of monetary policy. In the practical part is constructed an econometric model. Endogenous variables in the model are logarithms yields exchange rate CZK / EUR and inflation of monetary policy.
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