Exchange Rate in Czech Republic
Czech Republic - Exchange Rate
Koruna plunges in March on Central Bank rate cuts and coronavirus fears
The Czech koruna plummeted against the euro in recent weeks amid the Central Bank’s aggressive policy easing and sharp risk-off sentiment due to fears over the fast-spreading coronavirus. On 3 April, the koruna ended the day at CZK 27.5 per EUR, marking a 7.5% depreciation from the same day in March. Moreover, the currency was down 6.6% year-on-year and 7.7% year-to-date.
The koruna came under tremendous pressure in March over growing market expectations that the Central Bank would cut rates in response to the Covid-19 pandemic. In a surprise meeting on 16 March, the Bank slashed the two-week repo rate by 50 basis points to 1.75%, and delivered another greater-than-expected 75 basis-point-cut on 26 March to 1.00%, which exacerbated the koruna’s fall further. Analysts also contend that the koruna was particularly hard hit among CEE currencies given it was an overbought currency, as investors piled into it to take advantage of its expected strengthening after the Central Bank dropped the intervention regime that had kept it weak in April 2017. This positioning rendered it extremely vulnerable to sudden shifts in market sentiment, which materialized in March as investors flocked to safe assets when Covid-19 panic set in.
Looking ahead, the currency is expected to recover some of its losses by year-end due to the country’s solid macroeconomic fundamentals. Moreover, the Central Bank has demonstrated willingness to intervene in case of stark fluctuations. Downside risks persist, however, amid the ongoing coronavirus fallout.
FocusEconomics panelists project the CZK to end 2020 at 26.2 per EUR and 2021 at 25.4 per EUR.
Czech Republic - Exchange Rate Data
|Exchange Rate (vs USD)||24.82||25.64||21.29||22.51||22.62|
5 years of economic forecasts for more than 30 economic indicators.
Czech Republic Exchange Rate Chart
Source: Thomson Reuters.
Czech Republic Facts
|Bond Yield||1.64||-1.85 %||Dec 31|
|Exchange Rate||22.76||-0.66 %||Dec 30|
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August 6, 2020
Industrial production declined 11.9% year-on-year in working-day adjusted terms in June, which followed May’s 25.7% collapse.
August 6, 2020
At its 6 August meeting, the board of the Czech National Bank (CNB) unanimously decided to keep the two-week repo rate stable at 0.25%, coming in line with market expectations and marking the second consecutive hold.
August 3, 2020
The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 47.0 in July from 44.9 in June, marking the softest decline since March 2019.
July 31, 2020
The economy contracted at an unprecedented rate in the second quarter as the full brunt of Covid-19 related restrictions was felt.
July 24, 2020
The economic sentiment indicator, published by the Czech Statistical Office (CSO), continued to rise from April’s over two-decade low in July, coming in at 86.7 (June: 77.2). The business confidence index climbed to 84.7 in July from 73.8 in June.