The Czech National Bank is the central bank

Central bank

A central bank, reserve bank, or monetary authority is a public institution that usually issues the currency, regulates the money supply, and controls the interest rates in a country. Central banks often also oversee the commercial banking system of their respective countries...

 and financial market

Financial market

In economics, a financial market is a mechanism that allows people and entities to buy and sell financial securities , commodities , and other fungible items of value at low transaction costs and at prices that reflect supply and demand.Both general markets and...

 supervisor in the Czech Republic

Czech Republic

The Czech Republic is a landlocked country in Central Europe. The country is bordered by Poland to the northeast, Slovakia to the east, Austria to the south, and Germany to the west and northwest....

 with its headquarters in Prague

Prague

Prague is the capital and largest city of the Czech Republic. Situated in the north-west of the country on the Vltava river, the city is home to about 1.3 million people, while its metropolitan area is estimated to have a population of over 2.3 million...

. The Bank's governor is Miroslav Singer

Miroslav Singer

Miroslav Singer is a Czech economist and currently the Governor of the Czech National Bank. He received his PhD in Economics from the University of Pittsburgh in 1995.- References :...

. In accordance with its primary objective, the ČNB sets monetary policy

Monetary policy

Monetary policy is the process by which the monetary authority of a country controls the supply of money, often targeting a rate of interest for the purpose of promoting economic growth and stability. The official goals usually include relatively stable prices and low unemployment...

, issues banknote

Banknote

A banknote is a kind of negotiable instrument, a promissory note made by a bank payable to the bearer on demand, used as money, and in many jurisdictions is legal tender. In addition to coins, banknotes make up the cash or bearer forms of all modern fiat money...

s and coin

Coin

A coin is a piece of hard material that is standardized in weight, is produced in large quantities in order to facilitate trade, and primarily can be used as a legal tender token for commerce in the designated country, region, or territory....

s and manages the circulation of currency, the payment system and settlement between banks. It also performs supervision of the banking sector, the capital market

Capital market

A capital market is a market for securities , where business enterprises and governments can raise long-term funds. It is defined as a market in which money is provided for periods longer than a year, as the raising of short-term funds takes place on other markets...

, the insurance industry, pension funds, credit unions and electronic money institutions, as well as foreign exchange supervision.

Mission

Primary objective of ČNB as stated in the Act on ČNB is price stability. Secondary objective is to support a sustainable economic growth

Economic growth

In economics, economic growth is defined as the increasing capacity of the economy to satisfy the wants of goods and services of the members of society. Economic growth is enabled by increases in productivity, which lowers the inputs for a given amount of output. Lowered costs increase demand...

. Currently in employs inflation targeting

Inflation targeting

Inflation targeting is an economic policy in which a central bank estimates and makes public a projected, or "target", inflation rate and then attempts to steer actual inflation towards the target through the use of interest rate changes and other monetary tools.Because interest rates and the...

 monetary transmission mechanism. The goal is to stabilize inflation around 3.0% per annum.

Board members

• Miroslav Singer
  Miroslav Singer
  Miroslav Singer is a Czech economist and currently the Governor of the Czech National Bank. He received his PhD in Economics from the University of Pittsburgh in 1995.- References :...
  
   (Governor)
• Mojmír Hampl (Vice-Governor)
• Vladimír Tomšík (Vice-Governor)
• Robert Holman
  Robert Holman
  Robert Holman is a British dramatist whose work has been produced since the 1970s at the RSC, the West End, Royal Court Theatre and elsewhere in the UK...
  
  
• Kamil Janáček
• Lubomír Lízal
• Eva Zamrazilová

Monetary policy instruments

Banks can deposit excess liquidity overnight with ČNB at the discount rate and can borrow overnight funds at the lombard

Lombard credit

Lombard credit is the granting of credit to banks against pledged items, mostly in the form of securities or life insurance policies. The pledged items must be readily salable...

 rate. Thus these two rates create a corridor for the short-term money market rates. Moreover ČNB conducts open market operations in the form of repurchase agreement

Repurchase agreement

A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively...

s (REPOs). The basic duration is 2 weeks. Currently ČNB is absorbing excess liquidity. The aim of these operations is to influence the short-term rates which subsequently affects the economic activity, flow of capital and inflation.

External links

Czech National Bank official site Czech National Bank building on Prague-wiki