Koruna continues to strengthen

by   CIJ iDesk I
2020-01-15   12:58

The Czech koruna has continued its surprising climb, improving its two-year record along the way against the euro. By 5 pm on Tuesday, one euro cost CZK 25.17 while CZK 22.63 was enough to buy one U.S. dollar. The koruna hasn't been this strong since the beginning of February 2018. The Czech News Agency cites Next Finance analysts as chalking up the interest from investors to news on Monday that consumer inflation now exceeds 3 percent. However, they also expect that the Czech National Bank is unlikely to raise rates because of the currency's strength and worsening results in the manufacturing sector. The base rate in Czechia is already at 2 percent, far higher than the euro, so any widening of the gap could put further upwards pressure on the value of the koruna.