The Czech central bank's foreign currency reserves edged down by 0.3% m/m to EUR 40.7bn as of end-December 2013 after surging 17.3% m/m the month before, the central bank said on its website. The surge in FX reserves in November was a result of the bank's interventions on the currency market to weaken the koruna and keep it at 27 per euro. The central bank surprised the market on November 7 by stepping into the currency market for the first time in more than a decade to further relax monetary conditions after exhausting traditional monetary policy tools cutting its main two-week repo rate close to zero in November 2012 . The bank stared interventions to weaken the koruna and keep the exchange rate close to 27 per euro. The FX interventions will bring inflation up to the bank's target of 2% after it has been running below the bank's target for months. The bank has earlier said it sold CZK 201.3bn for euro in the period since Nov 7 . In annual terms, the central bank's foreign reserves were 19.7% higher in December, following the same annual hike in November. When recalculated in local currency, FX reserves stood at CZK 1.117tn as of end-December, down 0.2% on the month but 30.6% higher on the year. The central bank's foreign exchange position remains stable as the international reserves covered 55% of the country's gross external debt as of end-September 2013 .
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