New principles of the international reserves currency allocation

In the first half of 2003 the Board analysed the international reserves management strategy before joining the euro area. As a consequence the Board approved new principles of the international reserves currency allocation.

The volume of USD component of international reserves corresponds to the size of the monetary base, the remaining part is allocated in EUR. An active management of reserves investments results in further growth of international reserves assets, which is considered undesirable. The liabilities side of the CNB's balance sheet grows as well due to the interest paid on monetary operations. The Board stated that in this situation it is appropriate to implement a strategy to sell at least part of the reserves investments revenues on the market. These sales will act against the growth of the volume of sterilisation which represents the largest part of the CNB's liabilities. The sales of reserves investments revenues will be carried out gradually, in small volumes and if the market conditions (including liquidity, depth and trend changes) are considered appropriate.

The CNB will continue providing sufficient amount of information on international reserves as regards their volume, structure and changes. This strategy will be implemented gradually during 2004 Q2.

Pavlína Bolfová, CNB spokesperson