Final Word from Thursday, August 23, 2018
If someone asked you what you thought of the Czech currency shock of 2018, chances are you'd shake your head in confusion. That is unless you follow the CNB closely. The crown has fallen 2-4% from its high for the year, and Gov. Jiří Rusnok has taken to calling this a currency shock. Let's get some perspective: When "currency shock" was used for the Swiss franc 3-4 years ago, it was a 20-40% appreciation. There is no Czech currency shock. Rusnok is trying to create the illusion of one, because his efforts to revalue the crown haven't worked. And probably won't, given the uncertainty in the world. When Rusnok was asked at the end of June whether he might start selling the billions of euros bought with newly created crowns, he scoffed, saying that foreign reserves are like a nuclear briefcase. It was the converse of what Vice Gov. Mojmír Hampl had said before the CNB did indeed "flip the nuclear switch" and devalue the crown. Learn from history: Beware Rusnok's nukes. [ Czech Republic National Bank revaluation devaluation exchange-rate crisis atomic ]
Glossary of difficult words
to beware - be cautious and alert to risks or dangers;
nukes - nuclear weapons;
to take to doing something - to begin to like doing something;
Rusnok and currency shock - see the 19-minute mark of the linked video;
to revalue - opposite of to devalue (a currency);
to scoff - to speak in a way showing that you think something is ridiculous;
Rusnok and nuclear briefcase - see the 25-minute mark of the linked video;
converse - a situation, object or statement that is the reverse of another or corresponds to it but with certain terms transposed.