Tuesday May 24, 2022

QUESTIONS AND ANSWERS: The IMF loan is safe, you can give it back

Why is lending to the International Monetary Fund safe than lending to the European Conservation Fund? And for whom does the central bank need foreign exchange reserves? Pinme questions and answers about esk pjce for IMF.

Will it be a gift or a girl?
It would be a loan of more than 11 percent of the central bank’s foreign exchange reserves, which the NB actively invests primarily in foreign bonds.

To whom are foreign exchange reserves?
The bank serves to influence the exchange rate of the koruna and also as an insurance policy in crisis. If the state does not have pensions, they can be used in an emergency when paying for imported goods, such as oil.

Where did the reserves come from?
Most of them were earned by the bank at a fixed exchange rate as of March at a time when foreign capital was coming to a large extent in the 1990s. Thanks to the then gymnasium, the koruna was able to buy foreign currency cheaply. He gained foreign exchange, for example, by buying foreign currency for crowns from privatized income, which at the time needed the crown to pay the pension.


Pjka for the IMF. Infographics

M NB rezerv diet?
I have so many that he doesn’t want to raise them – now it’s 780 billion crowns. At the establishment of the NB in ​​1993, the bank had reserves of 16 billion crowns, over the last 10 years they have increased by 200 billion crowns. In 2010 alone, 4.4 billion euros were added, which is more than the IMF loan (3.6 billion euros). Even if foreign exchange reserves were to be reduced by this amount, they would reach the level of 2009.

Co NB kala dve a co nyn?
The central bank first announced that it had “decided not to increase the volume of foreign exchange reserves in order to mitigate the risk associated with an open foreign exchange position.” Now the Bank Board, composed of only those appointed by President Klaus, warns in the words of Governor Miroslav Singer that he is not sure whether he will not need reserves in the future. Looking at the time, it follows that throughout its history after the division of the federation of them, even during the banking crisis in 1997, it did not have to force enough to fall significantly.

In what bank do you have reserves?
The currency is denominated in several dollars, fixed in euros, and denominated in US dollars, but also in Canadian dollars or women’s crowns. You put in safe assets, government bonds, but also the stock index.

Vydlv on them, and prodlv?
The pension bank invests in foreign bonds. The overall bag usually delays, due to the gradual strengthening of the Czech crown. When the exchange rate of the koruna was sent, the value of the reserves in the kroner with the sn and the bank the loss of exchange rates. When the koruna weakens, the value of reserves in the koruna increases. This is mainly due to the accumulation of crowns. This would have to be done when R joined the euro area.

What does the IMF fund borrow?
The terms of the new loan are not known, but in general the IMF loan with a 60-year history is safe. The fund will pay pensions in the emergency in exchange for reforms. And in the event of bankruptcy, two more were paid.

How much did we drink from the IMF last time?
The previous loan from 2009 in the amount of one billion euros came directly from the reserves of the NB and is still depleted by only 13 percent, that is about three billion crowns. But that will change me anytime. It is low, the IMF salary is less than one percent. This is usually a pjku for five years. If the state is in danger of a balance of payments crisis, I will give it back.

Is there anything provided by the loan?
The Ministry of Finance paid the NB for the previous loan as a cost associated with the loan of 50 million K.

Which country should you call?
They are eurozone countries. Of the EU countries that do not have the euro, only Poland, widows and the Czech Republic. Britain has refused, Romania, Hungary, Lithuania and Latvia themselves pay more aid, and Bulgaria is poor. It is not even clear in the euro area itself. The strongest German Bundesbank makes its loan of 45 billion euros conditional on the fact that, in addition to Europe, it will join the loan for the IMF and great powers such as India, Brazil and Russia. The selected pensions should then save the hundreds in the south of the euro area in case of emergency.

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