The Czech koruna is experiencing a sustained weakening trend against prominent world currencies, marking its lowest points in several months. On Tuesday, the Czech koruna lost six halers against the euro, trading at 24.57 CZK/EUR, its weakest level since October of the previous year. Against the US dollar, it weakened by 12 halers, trading at 22.93 CZK/USD, reaching its lowest point since last December, according to figures reported by the Patria Online server.

Analyst Jaroslav Tupy from Purple Trading noted the ongoing depreciation of the Czech koruna, stating that since the start of September, it has weakened by 50 halers against the euro, approximately 2.5%, and by 85 halers against the US dollar, approximately 3.8%. Tupy pointed out that the koruna is nearing the level at which the Czech National Bank initiated foreign exchange interventions to support the currency.

Marketa Sichtarova, an analyst at Next Finance, anticipates a prolonged weakening of the koruna, citing the reversal of interest rate differentials between the Czech Republic and other countries as a significant factor. She expects the koruna to gradually approach the 25-crown mark against the euro.

Jana Steckerova from Komercni Banky (KB) shed light on the broader regional context, stating that regional currencies are facing pressure due to the surprising decision by the Polish central bank to cut interest rates the previous week. Speculation about potential interest rate cuts in the Czech Republic and further monetary policy easing in Poland is contributing to the depreciation of regional currencies.

The weakening of the Czech koruna against major currencies has implications for businesses engaged in international trade, tourists, and investors. It underscores the importance of monitoring exchange rate developments and managing currency risks for various stakeholders in the Czech economy. The reasons behind this recent depreciation are multifaceted and involve both domestic and international factors, making it a significant economic indicator to watch in the coming months.

Article by Prague Forum