The effects of a possible further worsening of the escalating Russian-Ukrainian conflict will hit the Polish one hardest among the Central European economies. Citigroup, the third largest bank in the USA, predicts this in its forecast. According to her, the Polish currency, the zloty, will be hit worse than the Czech koruna or the Hungarian forint.
Poland is more dependent on Russia than the Czechia or Hungary. At the same time, the currency market with the zloty is larger than the one with the koruna or the forint. However, this leads to him global investors use if they want in general, without a clearer focus invest in “Central European assets” or “Central European currencies”. However, in the event of a more serious worsening of the Russian-Ukrainian conflict, such general, superficial investors will withdraw from the Central European region first and foremost.
According to Citigroup, the possible introduction of further sanctions against Russia and its response in the form of additional counter-sanctions, including a potential restriction on gas exports, would lead to a weakening of the zloty against the koruna or the forint. However, this means that cross-border shopping would be further cheaper, especially for Czechs at the Polish border.
This year, the koruna strengthened against the euro as the only currency of the Visegrad Group
For the first time since February 2020, ie before the outbreak of the pandemic, the Czech koruna strengthened below the level of 25 crowns per euro. According to Bloomberg, she broke this psychological frontier shortly before 2.30 pm CET. It strengthened to the level of 24.972 per euro. Subsequently, however, she handed over part of her profits and the exchange rate returned above the level of 25 crowns per euro. Even so, the Czech currency is the only currency in the Visegrad Group to strengthen against the euro this year.
Cheaper shopping over the line
The zloty is the weakest in history this week free convertibility of both currencies, which has been written since April 2000. On Wednesday, the price of one zloty fell to the lowest in its history, when it sold for only 5.35 crowns. Now its price is only slightly higher, 5.36 crowns.
As part of the transformation, the Czechia adopted a free floating exchange rate regime in May 1997, and Poland in April 2000. For comparison, for example, in April 2015, the zloty was sold for almost seven crowns, and in 2001 for more than ten crowns.
The weak Polish currency favors shopping, especially for Czechs on the Polish border, who, thanks to an extremely advantageous course, go to the northern neighbor’s shopping even more in droves than usual. A further escalation of the Russian-Ukrainian conflict could therefore further benefit these purchases.
Czechs in particular from the northern parts of our country are already going to Poland more often than ever to buy not only food, but also clothes, fuel, or even furniture.
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