According to analysts, the expected further increase in interest rates by the Czech National Bank continues to help strengthen the koruna.
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The Czech currency is the strongest since mid-2011, when it traded at CZK 24.35 / EUR at the time, said Komerční banka economist Martin Gürtler.
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“It was stronger since the creation of the euro (the crown) only in the middle of 2008, when it broke the limit of 24 crowns per euro for a short time,” he added.
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At the beginning of the week, the koruna reached the strongest level against the euro since mid-October 2012, and then further improved the exchange rate. Since the beginning of this year, it has strengthened against the euro by 1.8 percent and against the dollar by 1.5 percent, warned Purple Trading analyst Jaroslav Tupý.
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According to Gürtler, investors have not yet managed to fully absorb the latest information from the CNB just before Christmas, when central bankers raised the key interest rate by one percentage point to 3.75 percent.
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At the same time, CNB Governor Jiří Rusnok stated that rates could get well above four percent.
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According to CNB Bank Board member Vojtěch Bendy, rates will rise to five percent and will move upwards at the next meeting of the Bank Board in early February, he said in an interview with the FocusOn news website published today.
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However, the koruna will weaken next year, according to an analyst forecast by Reuters.
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Gürtler also thinks that, after the expected increase in interest rates by the US Federal Reserve, the attractiveness of the Czech currency for investors will decline. “By the end of the year, we are already expecting a koruna close to CZK 25 / EUR,” he added.
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Czech exchange rate:
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Previous conclusion |
Friday around 17:00 |
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CZK / EUR |
24,51 |
24,44 |
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CZK / USD |
21,70 |
21,54 |
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