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The article analyzes the reaction function of the central banks of the Visegrad Group namely the Czech National Bank (CNB), the National Bank of Poland (NBP) and the Magyar Nemzeti Bank (MNB) for period January 1999 to April 2012 in order to formulate and verify an econometric backward looking model of the monetary policy rule. Topics discussed include an overview of research aimed at countries in Central Europe and the construction of an econometric model of the monetary policy rule.

The article presents a paper which was focused on analyzing the effect of liquidity withdrawal by the central banks of Czech Republic on the monetary policies that are based on repo operations. A microeconomic model has been developed for determining the behavior of commercial banks as it will help in defining the interest rate policies of central banks.