Koruna Slides To 6-day Low Against Dollar As Czech Central Bank Holds Rate

The Czech koruna gave back some of its early gains versus the US dollar in New York morning following the Czech central bank decision to maintain its key interest rates for the seventh rate-setting session in a row.

The koruna thus reached a 6-day low of 17.3940 against the US dollar around 9:15 am ET and the pair then exhibited sideways trading. On the downside, the domestic currency may find target around the 17.73 level. The dollar-koruna pair that was worth 17.3205 at Wednesday's close is currently quoted at 17.34.

The Czech National Bank kept the benchmark two-week repo rate unchanged at 0.75 percent. The decision was in line with expectations. The repo is the rate paid on commercial banks' excess liquidity as withdrawn by the central bank in two-week repo tenders.

The central bank's previous policy change was in May last year, when the key interest rate was lowered by a quarter-percentage point from 1 percent. Today, the bank also held the discount rate unchanged at 0.25 percent and the Lombard rate at 1.75 percent.