ABSTRACT
In December 1997, the Czech National Bank (CNB) announced a switch to inflation targeting. After eight years of relying on three strategies based on intermediate targets (see Table 1 for summary 2 ), this represented an historic change in the strategy of Czech monetary policy with regard to the way in which policy reacts to economic shocks_ The long-run strategy has not changed as much, however, as the stability of the Czech koruna has been the ultimate monetary policy target of the CNB since the very beginning of the Bank’s existence 3 and its monetary strategies have always been derived from the necessity of ensuring disinflation subject to the constraints imposed by the process of transition. 4
