Czech Republic: Czech koruna weakens in April amid political uncertainty
May 2, 2012
On 30 April, the Czech koruna (CZK) traded at 24.9 per EUR, which was 0.5% weaker than the CZK 24.7 per EUR recorded in the previous month and marked the first depreciation recorded so far this year. At the current level, the koruna is trading 2.7% weaker than in the same month last year. After an almost uninterrupted upward trend started at the beginning of this year, the koruna lost ground in April in the midst of the political impasse suffered when the government had to face a confidence vote in the Chamber of Deputies on 27 April. The government survived the vote but political uncertainty going forward may continue to hurt the currency in the short term. The Czech National Bank expects the koruna to average 24.9 per EUR this year, before strengthening to an average CZK 24.3 EUR in 2013.
Author: Ricardo Aceves, Senior Economist