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Czech central banks intervenes against koruna

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November 7, 2013 08:47 AM EST | AP


PRAGUE (AP) — The Czech Republic's central bank says it has decided to use foreign-exchange interventions to weaken the local currency, the koruna.

In a statement Thursday, the bank said it is aiming to stabilize the exchange rate against the euro at around 27 koruna ($1.3).

After the announcement, the Czech currency dropped to the weakest level since 2009.

It is expected the move, which was partly prompted by surprisingly low inflation rates, will increase some imported goods prices, including fuel, but that the weaker currency will have a positive impact for Czech exporters.

The bank started warning it might take such a step a year ago.

To help the struggling economy, the central bank cut its key interest rate to a record low of 0.05 percent in November.