Czech koruna slides to CZK 25.80 / EUR
The economy is facing a slowdown in German industrial output on the one hand, and rising inflation on the other. It's a situation that's sent the Czech koruna tumbling and leaves the Czech National Bank with a conundrum. Should it try raising interest rates to drive a bit of demand in the Czech currency, or leave them the same in an attempt to give the economy a bit of gas? The rule of exchange rates seems to be that when the euro weakens against the dollar, the koruna weakens toward the euro. So when the EU's common currency dropped 0.2 percent yesterday to 1.138 USD/EUR, the koruna lost 0.4 percent, leaving it at CZK 25.80 / EUR. Kurzy.cz predicts that the CNB will raise rates twice this year: once in May and again in August.