The Czech central bank's preliminary profit in 2013 surged to CZK 73.2bn ( EUR 2.7bn ) from CZK 2.9bn the year before on the back of the foreign exchange interventions launched by the bank in November, the bank said. The profit will be used to cover retained losses from previous years which stood at CZK 123.6bn as of end-2013. 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 and ward off deflation threat. The bank stared interventions to weaken the koruna and thus keep the exchange rate close to 27 per euro. A weaker koruna boosts the value of the bank's foreign currency reserves improving its bottom line. Yet, in the long run when the local currency strengthens the bank will book a loss from the lower valuation of the foreign currency holdings. 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.
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