Historical Sketch

The Austro-Hungarian defeat in the First World War triggered the fall of the Habsburg monarchy. The Austro-Hungarian Empire collapsed and disintegrated into different national states. The former crown lands of Bohemia, Moravia and Slovakia merged into Czechoslovakia in 1918. In the late 1930s, Nazi Germany first obtained the cession of the Sudetenland border territory, then occupied and dissolved Czechoslovakia before the outbreak of World War II. Bohemia-Moravia became a German protectorate while Slovakia attained nominal independence. After the liberation in 1945, Czechoslovakia was restored under communist rule. In the 1990s the dissent between the two parts of the country became apparent again, and at the end of 1992, Czechoslovakia was dissolved for the second time and split into Czechia and Slovakia.

Monetary History Overview

The Protectorate of Bohemia and Moravia was immediately integrated into the German monetary area, within a week the Czechoslovak currency was pegged to the German Reichsmark. The exchange rate corresponded to a devaluation of about one third against the US Dollar. In April the National Bank for Bohemia and Moravia took over as successor to the Czechoslovakian National Bank. The issuance of the Bohemian-Moravian Crown (or "Protectorate Crown") went on slowly so that the Czechoslovak banknotes were only gradually withdrawn. When Czechoslovakia was re-established in early 1945, the Bohemian-Moravia Crown was introduced in the reclaimed Sudetenland so that the German Reichsmark could be withdrawn immediately, without need to wait for the reconstitution of the Czechoslovak monetary order. In May 1945, The Czechoslovak National bank was re-established and the Bohemian-Moravian central bank disappeared. In November 1945, the Bohemian-Moravian Crown was withdrawn within 4 four days and exchanged into the new Czechoslovak currency.

The peaceful split of Czechoslovakia into the Czech and Slovak Republics meant also meant a proportional distribution of the country's asset. The Czechoslovak State Bank was divided into the Czech and Slovak National Banks, which both issued their national currencies. Beginning of January 1993, the Czech Crown replaced the Czechoslovak Crown on par. The currency has appreciated by about 35% against the European currencies, since the mid 2010s the fluctuation against the Euro is small.

Czechia joined the International Monetary Fund (IMF) on 01.01.1993.

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