Koruna strength despite Iran tension surprises analysts

by   CIJ iDesk I
2020-01-09   12:51

The Czech koruna has strengthened unexpectedly, taking many analysts by surprise, reports Novinky.cz. Those who expected the currency to weaken due to tensions over the Iran crisis were mistaken, as it's possible the CZK 25 per euro barrier could be broekn. As of Wednesday, the rate was CZK 25.23, the strongest it's been in two years. Novinky.cz cites Patria Finance's Jan Bureš who wrote that international tensions like those that erupted over New Years tend to make investors nervous about global stock markets and "riskier assets" such as the Czech koruna. Akcent's analyst Miroslav Novák says that the recent strengthening is connected to renewed interest in currencies like the koruna or the Polish zloty with higher interest rates. The Czech National Bank has been holding its base interest rate at 2 percent, which is 2 percent higher than the European Central Bank's rate.