CNB intervened by c.EUR 4.3bn during July-August

The Czech National Bank published FX reserve data for August and intervention data for July yesterday. The country's FX reserves were up by a sharp $5.4bn in August and the CB disclosed that it had intervened by around EUR 1bn in July. CNB had disclosed earlier that it had intervened once in July, but it did not disclose the amount nor whether it had intervened again in August. The data indicates that CNB now has to intervene regularly. 

"A part of the increase in USD reserves can be explained by the increase in the EUR-USD exchange rate in late August; adjusting for this, preliminary calculations still suggest that CNB had to intervene by a larger EUR 3.3bn-3.5bn in August and bring the EUR-CZK exchange rate towards the 27.00 official floor", argues Commerzbank. 

EUR-CZK rose in trading yesterday to 27.05 levels, opposite the expected direction of movement - this was probably because CNB intervened pre-emptively to ward off unwanted speculation on the back of the data.