CEE Exchange Rates Report for November 18th - 22nd
By : Zoe McLaughlin, The Quinnipiac University Economics Research Team
CEE Currencies Index
Source: Eurostat and own calculations. Exchange rates are inverted to be USD per local currency (i.e., an increase indicates a stronger domestic currency) and then indexed to 100 at the start of the period.
During the week of November 18 – November 22, the Czech koruna (red), Hungarian forint (green), Polish złoty (blue), and Romanian leu (purple) all increased in value relative to the United States dollar. The Czech koruna increased relative to the United States dollar by 1.93%. The Romanian leu ended the week with an increase of 1.64%, the least significant change among the four currencies. The Polish złoty ended the week at an increase of 2.05%. The Hungarian forint experienced the most significant change, ending the week at an increase of 2.62% relative to the United States dollar. All four currencies gradually increased throughout the week, reaching their highest points on November 22.
CEE Currencies Historical Trends
Source: DBNomics and own calculations. Exchange rates are inverted to be USD per local currency (i.e., an increase indicates a stronger domestic currency). The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.
The Czech koruna, Hungarian forint, Polish złoty, and Romanian leu are all over one standard deviation below their respective three-month rolling averages, continuing their recent downward trends from October throughout the month of November. All four currencies at their respective three-month lows versus the United States dollar, and the rate of these decreases has been accelerating over recent months, particularly with the Romanian leu and Czech koruna.
Additional Reading
At their November meeting, the Magyar Nemzeti Bank elected to keep interest rates unchanged, leaving Hungary’s policy rate at 6.50%, where it has remained since September. The primary reason behind this decision is overall economic instability in the country, particularly concerning agriculture and external demand. While Hungarian inflation has shown slight improvement this month, the bank remains concerned about long-term inflation, especially regarding food and fuel.
Poland and Romania have both been experiencing stagnation due to weak consumer demand this quarter, which has been propelled by Germany’s economic struggles. Poland’s GDP was expected to increase by 0.3% in the third quarter, but it instead decreased by 0.2%. The Czech Republic achieved GDP growth, but Romania’s economy was stagnant, and Hungary entered a recession due to lowered domestic consumption. Overall, consumers in the CEE region have been saving more and spending less due to the economic uncertainties.
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