Czech Central Bank May Cut Rates on Koruna Strength, Tuma Says

Source:www.bloomberg.com

July 22 (Bloomberg) -- The Czech central bank may cut interest rates as soon as next month because the koruna's record strength threatens to ``damage'' the economy, central bank Governor Zdenek Tuma said.

The koruna, the world's best-performing currency, has gained 23 percent against the euro and 41 percent against the dollar in the past year. The strength, which caps inflation by curbing import costs, is ``steamrollering'' over inflationary influences, including fuel and wages, Tuma said in a Prague interview today.

Policy makers are concerned the koruna is rising beyond what the economy can sustain as exporters are complaining the currency's advances eat into revenue and may lead to job cuts and plant shutdowns. The seven-member central bank board is turning its focus from keeping borrowing costs unchanged or raising them to mulling a rate cut to compensate for the koruna gains.

``The debate we had at the last monetary session, whether to keep or raise interest rates, is over at this point -- now there will be a debate whether to leave or lower rates,'' Tuma said. ``Should the koruna remain at the current levels or further appreciate, I can't rule out that there would be a debate on the table over how much to cut.''

The koruna was trading at 23.024 per euro as of 1:33 p.m. in Prague, compared with a record 22.877 yesterday.

Central bankers will next meet on Aug. 7 to set interest rates, based on a new quarterly forecast that still is being prepared.

EU's Lowest Rate

Even after eight increases in the past three years, the Czech Republic's two-week repurchase rate of 3.75 percent is lower than the 4.25 percent benchmark rate in the euro region.

The inflation rate in June fell to 6.7 percent from May's 6.8 percent, exceeding the central bank's 3 percent target for a ninth month.

Discounting the koruna effect, monetary policy makers continue to be ``convinced'' that inflation will decelerate toward the target at the end of this year and at the beginning of 2009 after this year's changes to indirect taxes and regulated prices drop out of the annual index, Tuma said.

Now there is a threat the koruna will squeeze inflation to below the bank's goal of 3 percent plus or minus a percentage point, the governor said.

``With what the koruna has performed in the recent months, I dare say that it can't be excluded that we would be undershooting our inflation target in the crucial horizon of four to six quarters,'' he said. ``It's obvious that no economy can withstand such a marked currency strengthening without being damaged.''

Slowdown Ahead

The gains will probably cause a more significant slowdown in economic growth than the central bank's current 4.7 percent forecast for this year, Tuma said. Gross domestic product grew 6.6 percent in 2007.

The central bank, which last sold the koruna on the market in an effort to weaken it in 2002, is still wary to use that ``tricky'' tool again, Tuma said.

``I cannot rule out completely and forever'' that the central bank would be selling the koruna, ``but from the policy we have followed in the last five to six years, it's clear that we don't rush to a policy of intervention and that it is a last resort to us,'' he said.

He declined to elaborate on what a ``last-resort'' situation would be.

Employment of Foreigners in the Czech Republic

Source: www.mzv.cz

The conditions for employing foreigners in the Czech Republic are laid down in the Law on employment according to which foreigners or persons without citizenship may be employed in the territory of the Czech Republic provided that they were granted an employment permit and residence permit.

Similarly as for employment, an employment permit is also required for a foreigner or a person without citizenship who intends to work in the territory of the Czech Republic within a labour relationship with a foreign employer who is sending him(her) to perform such work on the basis of a commercial or other agreement concluded with a Czech legal or natural person.

The Labour Authority in the territory of which the employment is to be performed makes the decisions on issuing a permit to acquire an employee from abroad and on an employment permit for such employee.

Issue of a permit for an employer to acquire employees from abroad, as well as issue of an employment permit for a foreigner is subject to payment of an administrative fee.

An exception from the above provisions is granted for the citizens of the Slovak Republic who are employed in the territory of the Czech Republic on the basis of Agreement No. 227/1993 Coll. between the Czech Republic and the Slovak Republic on mutual employment of citizens and Administrative agreement between the Ministry of Labour and Social Affairs of the Czech Republic and the Ministry of Labour and Social Affairs and Family of the Slovak Republic related to the Agreement between the Czech Republic and the Slovak Republic on mutual employment of citizens.

A Czech employer shall register a citizen of the Slovak Republic at the Labour Authority in the area of his(her) registered seat. A foreign employer who is sending a Slovak citizen to perform work in the territory of the Czech Republic shall register such person at the Labour Authority in the area where the work will be performed.

The employer:

The Law subjects the possibility to acquire employees from abroad to the condition that such employees may only be acquired for vacancies that have been notified by the employer to the Labour Authority and for which a Czech citizen, and in particular an applicant for employment, can not be hired. Vacancies mean newly created or vacated jobs for which the employer intends to hire an employee.

An employer shall submit an application for a permit to acquire employees from abroad to the Labour Authority in the area where the work of the future employee will be performed. With the application, the employer shall submit an officially verified copy of the following documents: excerpt from the Business Index, business permit or other certification of the statute of the organization, e.g. the foundation instrument of a social organization, etc.

Within the administrative procedure, the employer shall document, on request by the Labour Authority:

how (s)he has dealt with the lack of labour force (advertisement, labour market, unsuccessful offer for training, etc.)

detailed characteristic of activity for which a foreigner will be hired;

description of accommodation allowing for assessment whether such accommodation complies with sanitary regulations.

A permit to acquire employees from abroad may be issued provided that the employer offers the foreign employee the same labour and salary conditions as are usual for Czech citizens within the same labour assignment pursuant to the valid regulations or in accordance with collective agreements or labour agreements, as appropriate, and that the foreigner will be insured within compulsory social and health insurance.

For this purpose, the Labour Authority shall require that the employer submit a draft labour contract that must include, in addition to information following from the Labour Code (i.e. type of work for which the employee is hired, the place of work and the day of commencement of work):

• the expected term of employment;
• gross salary for the performed work;
• the address of accommodation and the manner of payment therefor.

The draft labour contract shall be accompanied by documents on:

• the manner of ensuring financial means for traveling to the country of residence following termination of the labour relation (including premature termination);
• officially verified certification of provision of accommodation for the expected term of employment.

When the Labour Authority issues a permit to the employer to acquire employees from abroad, each foreign employee, prior to commencing labour activities for such employer, must obtain an employment permit from the locally competent Labour Authority pursuant to the place of employment and a residence permit for the purpose of this employment.

When the Labour Authority issues a permit to the employer to acquire employees from abroad, this employer may employ foreigners only provided that these have

• a valid employment permit issued by the locally competent Labour Authority pursuant to the place of employment,
• a valid residence permit for the purpose of employment,

concluded a written labour contract for a term that is in accord with the term set by the Labour Authority in the decision on employment permit for such foreigner,

and provided that the employer registers these employees for payment of social and health insurance premiums.

The obligation of the employer to notify the Labour Authority within 5 calendar days of hiring an employee for a vacant job (newly created or vacated) also applies when a foreign employee is hired for such job.

A permit to acquire employees from abroad is also required for employers who already employ a foreigner on the basis of relevant permits and who intend to transfer such foreigner to a different place of employment outside of the district for which a permit to acquire employees from abroad has been issued.

A permit to acquire employees from abroad is not required for foreign employers who are sending their employees to the Czech Republic to perform work on the basis of a commercial or other agreement concluded with a Czech legal or natural person.

An application for employment permit shall be submitted by a foreigner who

intends to be employed in the territory of the Czech Republic within a labour-law relationship with a Czech legal or natural person. This category also includes e.g. company associates, acting officers, members of supervisory boards, chief clerks, limited partners in limited partnerships etc., who, in addition to such activity, intend to be in a labour-law relationship with a commercial company founded pursuant to the Commercial Code;

are in a labour-law relationship with a foreign employer who is sending him(her) to perform work in the territory of the Czech Republic on the basis of a commercial or other agreement concluded with a Czech legal or natural person.

Together with the application, the foreigner shall submit:

a copy of the page of his(her) passport containing the basic identification information;

officially verified copy of a document on his(her) professional qualification for the area in which (s)he will work in the territory of the Czech Republic (certificate of apprenticeship, secondary school certificate, certificate of completion of university studies etc.); such document must be translated into Czech language and officially verified;

health certificate for work in medical professions, restaurants, foodstuff industry or other areas where such certificate is required.

The foreigner shall be a participant in the administrative procedure in which (s)he may be represented by a representative authorized thereby (usually the employer) on the basis and within the scope of the power of attorney.

The Labour Authority shall issue an employment permit for a vacancy reported by the employer for which the employer has obtained a permit to acquire employees from abroad.

The Labour Authority shall also issue an employment permit for reported vacancies for which employees will be hired through voting or designation and for which the employer is not obliged to obtain a permit to acquire employees from abroad. In this case, the employer shall prove in writing that the employee is hired for such job on the basis of voting or designation.

An employment permit is issued for a fixed period of time, however not exceeding one year. A foreigner may apply for an employment permit repeatedly.

An employment permit is not transferable and contains information expressly stated in the decision concerning

• the employer,
• the place of employment,
• type of performed work,
• term of employment.

An employment permit is valid only for employment at the employer set forth in the decision. The permit is also connected with a certain type of work and place of employment. If certain conditions set forth in this employment permit are to change before expiration of validity of the permit, the foreigner is obliged to request the locally competent Labour Authority to issue a new employment permit.

An employment permit is required for all labour-law relationships in the sense of the Labour Code, performed by a foreigner in the territory of the Czech Republic, i.e. employment, secondary employment, agreement on performance of work, agreement on labour activities, also if such labour-law relationships occur concurrently. If a foreigner concurrently performs several jobs in the territory of the Czech Republic, a separate employment permit is required for each employer and this permit must be issued by the locally competent Labour Authority pursuant to the place of the given employment.

During the term of employment, a foreigner who is employed pursuant to the valid regulations of the Czech Republic is subject not only to labour-law regulations, in particular the Labour Code, but also to salary regulations, and regulations on general health insurance and social security.

With regard to the situation on the labour market, an employment permit shall also be issued to a foreigner who will be

employed in a border region with daily or weekly commutation to the place of is(her) residence in the neigbour state;

a seasonal employee for a term of six months during a calendar year with a period of at least six months between the individual cases of employment;

employed for the purpose of increasing his(her) abilities and qualification in the given profession (affiliation) for a set period of time not exceeding one year. The term of employment may be prolonged, however not for longer than is necessary for acquiring professional qualification pursuant to the regulations valid in the Czech Republic;

performing continuous educational activities as a pedagogical assistant or academic assistant of a university.

Without regard to the situation on the labour market, an employment permit shall be issued to a foreigner

designated in an international agreement binding the Czech Republic and published in the Collection of Laws;

under 26 years of age who is performing occasional and temporally limited work in the framework of a school exchange.

In the above cases, the jobs in question are not reported as vacancies and hiring of foreigners for such jobs does not require a permit to acquire employees from abroad pursuant to § 19 of Law No. 1/1991 Coll., on employment, as amended.

An employment permit is not required for a foreigner who

is granted the position of a refugee or has applied for granting of such position;

has a permit for permanent residence in the territory of the Czech Republic;

is a relative of a member of a diplomatic mission, consulate or a relative of an employee of an international government organization with a seat in the territory of the Czech Republic provided that reciprocity is guaranteed by an international agreement concluded on behalf of the Government of the Czech Republic. In this case, the employer shall notify the locally competent Labour Authority within 8 working days from commencement of the employment of the foreigner. This notification is important for control and statistical purposes.

isan artist,a pedagogical assistant,an academic assistant of a university,a scientific assistant attending a scientific meeting,a pupil or student up to 26 years of age,a sportsman,a person providing for supply of goods or services or supplying such goods in the Czech Republic,a person carrying out assembly on the basis of a commercial contract or carrying out guarantee and repair works,and whose period of stay in the territory of the Czech Republic does not exceed seven consequent calendar days or a total of 30 days during a calendar year. In this case, the employer shall notify the locally competent Labour Authority within 8 working days from commencement of the employment of the foreigner. This notification is important for control and statistical purposes.

is employed in the territory of the Czech Republic pursuant to an international agreement binding the Czech Republic and published in the Collection of Laws;

is a member of a rescue squad and is providing assistance on the basis of an international agreement on mutual assistance in eliminating consequences of accidents and natural disasters and in case of a humanitarian aid;

is employed in an international public transport;

is accredited in the media;

is a member of military forces or a civil unit of a party to the North Atlantic Treaty;

enjoys diplomatic or consular privileges and immunities pursuant to international law.

The Law on employment does not apply to a foreigner who

performs labour activity on the basis of a small business authorization and registration in the Business Index,

performs activities in the territory of the Czech Republic in the framework of mutual affiliations of university students and young university graduates provided that this is carried under the following conditions:

the purpose of the mutual affiliation consists in education, including "life-long" education,

the potential employment is a part of such education,

the income of the foreigner in the territory of the Czech Republic is not derived from his(her) working performance and the conditions for providing such income are based on an agreement with the foreign organization sending the foreigner for such affiliation (usually by means of a fellowship or contribution from a fund), and not on a labour contract or any other individually concluded labour-law agreement with a legal or natural person with a seat in the Czech Republic.

The above conditions may be proved through a contract (usually on international cooperation in education) on the basis of which the foreigner has been sent to the Czech Republic.

An employment permit is also required for a foreigner who will perform work in the territory of the Czech Republic within a labour-law relationship with a foreign employer who is sending him(her) to perform work on the basis of a commercial or other agreement concluded with a Czech legal or natural person.

The procedure of making decision on an application of a foreigner for an employment permit is similar as for a foreigner who will be employed within a labour-law relation with a Czech legal or natural person.

Furthermore, a copy of the commercial or other agreement concluded by the foreign legal or natural person and the Czech legal or natural person, and a copy of the document authorizing the foreign entity to carry out activities that are the subject matter of the commercial or other agreement shall be annexed to the application for an employment permit. For a group of persons, such documents shall be submitted in a single copy. The foreign employer shall submit such annexes translated into Czech and officially verified.

A foreigner employed by a foreign employer and sent to perform work in the Czech Republic shall be remunerated in accordance with the labour contract concluded with his(her) employer. The concluded labour contract, as well as health insurance and social security, shall usually be subject to regulations valid in the country of the employer who is fully responsible for the contents of the contract, as well as for the payment of insurance premiums.

Employment of foreigners on the basis of international agreements is subject to valid regulations unless such agreement lays down otherwise.

International agreements respect regulations of the parties thereto and take into account requirements of the parties for administrative procedure on mutual employment and/or allow for laying down limits for the number of employed foreigners for the individual calendar years.

The procedures of the Labour Authority in issuing, refusing issue and withdrawing foreigner's employment permit are usually laid down in the principles of the pertinent international agreements or protocols thereto.

Prior to expiry of the term of validity of an employment permit, a foreigner may submit application to the competent Labour Authority for a new (repeated) issue of the employment permit.

The competent authorities of SCPP pursuant to the place of residence decide on prolonging residence permits.

The validity of an employment permit extinguishes

with expiry of the period for which it was issued,

with termination of the employment prior to expiry of the period for which the employment permit was issued,

with expiry of the period for which a residence permit was issued or with extinguishment of a residence permit for other reasons.

An employment permit shall be withdrawn from a foreigner on the basis of a decision by the Labour Authority if the foreigner fails to comply with the conditions laid down in the decision on the employment permit. A specimen form of a decision on withdrawing an employment permit is available in the OK system.

A foreigner who is employed without an employment permit may be punished pursuant to regulations valid for this area.

An employer who employs a foreigner without the pertinent permits may be punished pursuant to regulations valid in the area of employment.

Scholarships for foreign students in Czech Republic

Source: www.czech.cz

In the academic year 2004-05, there were 14,147 foreign students studying in the CzechRepublic. To finance their study and necessities of life, these students often utilize scholarship programs offered by specific universities, the Czech Republic or their home country.

Scholarships based on international conventions

The Ministry of Education, Youth and Sports of the Czech Republic also awards scholarships in accordance with international conventions that are binding for the Czech Republic:

• Implementation programs for so-called cultural agreements
• Departmental contracts agreed with partner ministries in abroad
• Agreements on approval of documents on education

An updated list of scholarships offered on the basis of international agreements is published by means of the Academic Information Agency , one of the organizations directly controlled by the ministry.

Programs of European Union

The following programs are among the most sought after.

Socrates

This program was created with the intent to support mutual relations and cooperation of universities within the European area, improve language classwork, inform on educational systems in different countries and give a European dimension to education.

Study stays of students and teachers are set up on a reciprocal base. Student exchanges usually last two semesters. Agreements with individual universities are renewed annually, together with accurate determination of the number of the students sent and the duration of their stay.

The program has eight sub-programs, depending on focus.

• COMENIUS - education from pre-school facilities to advanced vocational schools

• ERASMUS - college education

• GRUNDTVIG - education for adults

• LINGUA - language education

• MINERVA - utilization of information and communication technologies in education, open and distance education

• RESEARCH & INNOVATION – solving issues and questions of educational policy

• COMMON ACTIONS - cooperation with other EU programs

• SUPPLEMENTARY ACTIVITIES – supporting activities not included in individual sub-programs.

Leonardo da Vinci

This program is focused similarly on the support of quality, innovation and a European dimension of professional education. An important part is cooperation on many levels: training centers, vocational schools, universities, enterprises, economic chambers and many others. The objective is to increase mobility, stimulating innovation and quality.

Cooperation within the program is set up on a project basis.

Other programs engaged in mobility within the European Union are:

• Youth focuses on the support of enlightenment of youth, including informal
• Jean Monet focuses on the theme of European integration in the area of economics, law, politics, history and philosophy
• European Voluntary Service enables those who are interested to work as volunteers in a foreign country for a period up to one year
• eLearning has the objective of the effective incorporation of information and communication technologies (ICT) in systems of education and professional training in Europe

Scholarships granted by universities

Students of Czech universities can receive scholarships from state grants:

• for excellent study results
• for excellent scientific, investigative, development, artistic or other creative results that contribute to increasing knowledge
• in case of hard social circumstances of a student
• in cases deserving special consideration
  

Scholarships paid from grants may be awarded also to support the study of foreigners in the Czech Republic and to students of medical study programs.

Scholarships are granted and paid to students by university or faculty, depending on the specific scholarship regulations.

Besides scholarships paid from state grants, a school can grant a scholarship from other sources (e.g. from a scholarship fund).

In general, scholarship regulations do not limit access to scholarships only to the Czech citizens. However, the chance of receiving a scholarship

.

Philosophical Faculty of Masaryk University

The dean of the Philosophical Faculty of Masaryk University grants six and the Institute for Czech Language two three-month scholarships in the amount of CZK 4,500 per month to those who study Czech language, literature and culture.

These scholarships are effective from October till December, and are intended for students interested in Czech studies. The applicants have to prove a good knowledge of the Czech language to be able to attend lectures and seminars held in Czech. The scholarship does not include health insurance.

Applications for scholarships for the following academic year should be submitted no later than April 30.

Additional information

Charles University

The university is involved in the Socrates/Erasmus program, which is financed by European Union, in order to support mutual relations among universities in Europe, improvement of the education system and to better the understanding of European dimensions.

Additional information on the Socrates program can be found on the websites of the European Centre in Brussels , or on the Centre for Higher Education System websites.

State scholarships within foreign growth support

Since 2001, state scholarship places are granted for study at public universities in the Czech Republic for citizens from developing and other needy countries for years 2003–07. Every year, 250 students from East European countries, Asia, Near East, North and Sub-Sahara Africa and Latin America are admitted.

First of all, foreign applicants for the Czech state grant for study at a university in the Czech Republic are awarded scholarships to be able to graduate a two-semester language and professional training, during which students get familiar with the spoken and technical Czech language. They must successfully pass the entrance exam at university, on the basis of which they are awarded a scholarship as one of 170 students for study in a bachelor's (standard period of study is three to four years), or master's (four to six years) study program, and 80 students are awarded scholarships for study in medical study program (three years). Graduates are awarded academic titles.

For a standard period of the free-of-charge study, a student is granted a monthly scholarship, which covers necessary costs of living and studying in the Czech Republic. In addition, health insurance is provided to the same extent as to those student with permanent residence in the Czech Republic.

Students' traveling expenses to the Czech Republic and back to their homelands after the end of studies, regardless of the reason study was terminated, is not paid by the Czech side, but by the side that proposed the student's study in the Czech Republic, or the student him/herself from his own money.

The deadline for applications is always January 15. Applications are accepted and more information on the scholarship places offered for the respective academic year provided by the Czech Embassy in the country of origin.

International Association of Universities (IAU)

IAU is a worldwide organization with member states in 150 countries worldwide that cooperates with a number of international, regional and national institutions. Membership may be obtained by any higher education institution and associated membership appertains to other international and national university organizations.

The International Universities Bureau, with its seat in UNESCO, Paris, provides a wide palette of services to member institutions and international communities of higher education.

As a cooperating and pro-services oriented organization, the IAU concentrates exclusively on the exchange of information, experience and ideas, simplification of academic mobility and international cooperation of universities, and contributes through research and meetings to the discussion on educational policy.

Among IAU member states are:

• Univerzita Karlova v Praze (Charles University in Prague)
• České vysoké učení technické (Czech Technical University)
• Masarykova univerzita (Masaryk University)
• Vysoká škola báňská Technická univerzita Ostrava (Institute of Mining and Metallurgy in Ostrava)

The Fulbright scholarship

The Fulbright scholarship program provides Czech and American citizens chosen on the basis of their knowledge and abilities the opportunity to study, instruct or carry out research in the United States or in the Czech Republic.

The goal of the Fulbright scholarship is to increase understanding between the United States of America and the Czech Republic though educational exchanges and placements.

The Fulbright Commission administers the program on the basis of a bilateral agreement between the governments of the Czech Republic and the United States.

The commission judges applications to all programs in cooperation with specialists in a given field. The Fulbright Executive Council then gives its agreement with the nomination of Fulbright scholars in the Czech Republic. A selection committee oversees the recommendation as well as the availability of financial support and other program requirements. Final approval with the bestowal of all grants is given by the J. William Fulbright Foreign Scholarship Board, which is named by the president of the United States and is located in Washington.

US and Czechs sign defence deal

Source: www.bbc.co.uk

US Secretary of State Condoleezza Rice has signed a deal to base part of Washington's controversial missile defence system in the Czech Republic.

The deal, signed in Prague, allows a tracking radar base to be set up.

The plans remain unpopular in the Czech republic, and the US has also failed to reach agreement with Poland on housing other parts of the system there.

Russia is strongly against the missile defence system, saying it would pose a threat to its security.

Moscow has threatened to aim its own missiles at any eventual base in Poland or the Czech Republic.

'Constructive talks'

Ms Rice said that she had earlier held constructive talks with Poland's foreign minister, but declined to predict whether the US and Poland would reach an agreement.

"We have told them what we can do... There are still some issues, so I can't say for certain what the trajectory is, but it was a constructive meeting," she said after talks on Monday with Radek Sikorski in Washington.

The missile defence system would include the tracking radar system in the Czech Republic and 10 interceptor missiles in Poland. The US wants the sites to be in operation by about 2012.

A second deal covering the status of US soldiers at the Czech base has not been agreed.

Czech opposition parties have strongly criticised the plans and are calling for a national referendum.

The plans would have to be approved by the Czech Parliament, where the government would need the votes of the opposition parties to get them through.

Jan Majicek, of the No Bases Initiative, said that more than 100,000 people had signed a petition against the Czech base.

Czech trade surplus grows in May but exports sag

Source: www.forbes.com

PRAGUE, July 4 (Reuters) - Czech foreign trade showed a bigger-than-expected surplus in May, sending the crown currency to an all-time high, but relatively weak exports underlined worries about the currency's effect on future economic growth.

The monthly trade surplus grew to 9.22 billion crowns ($612.9 million) in May from 8.28 billion in April and was above the 6.5 billion forecast in a Reuters poll .

Fellow central European EU member Hungary revised its April trade surplus to 64.1 million euros from 54.1 million on Friday, marking a turnaround from a deficit last year.

The Czech news propelled the crown to 23.72 to the euro, a fresh record high, following 23.74 reached overnight and 23.83 late on Thursday.

Trade figures have been under close scrutiny in the Czech Republic. Highly dependent on external demand, it is expected to come under pressure from a western European economic slowdown and its strong currency, which has gained 17.4 percent against the euro over the past year.

The Czech Statistical Bureau (CSU) said exports were flat in crown terms in May, while imports dropped 2 percent year-on-year. In euro terms, exports grew 12.5 percent and imports rose 10.3 percent.

These figures worried analysts who said they were a sign that the overall economy would take a hit later this year.

'Here, the combination of weakening foreign demand and the strong crown is showing,' said Jan Vejmelek, an analyst at Komernci Banka. 'The data confirms our pessimistic outlook for further May data from the real economy. We are especially concerned about industrial output.'

That view was echoed by the central bank, which said in the minutes of its June 26 monetary policy meeting that the crown was a major anti-inflationary factor that would affect inflation and output.

'It was said that the exchange rate had recorded its highest-ever nominal year-on-year appreciation and it was repeated several times that if this situation were to continue it would inevitably have impacts on inflation and economic growth,' the bank said in the minutes, released on Friday.

'There was broad agreement that the impacts of the appreciation on prices and real economic activity would show up mainly at the end of this year and the beginning of the next.'

Many export companies have called on authorities to act to stem the crown firming, saying they could not handle such a pace of appreciation. Analysts say the unit has strengthened mainly due to strong trade performance, economic fundamentals, and its status as a safe haven during times of risk aversion.

The central bank targets inflation only and has refrained for years from intervening in the foreign exchange market.

Analysts have said exporters have increasingly been hedging against the crown's rise, but the hedges typically needed to be refreshed at stronger levels, which delayed rather than removed the exchange rate impact on companies.

Economic growth slowed to 5.3 percent in the first quarter from 6.3 in the previous three months, and more cooling is expected.

Czech Republic: Water electric station in Dlouhe Strane and Praded(Moravian highest peak)

Global Village 2008 Zlin, Czech Republic

Euro2008

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