Czech crown falls to euro to lowest level since March 2009


05.08.2014 17:44

Prague - The Czech crown currency weakened in the afternoon beyond Kc27.70/EUR, the lowest level since March 2009, and after 16:30 it stood at Kc27.75 per euro, the server Patria Online reported.


Peníze, euro, česká koruna, bankovky - ilustrační foto. ČN Vilém Kolomazník

The crown hit a two-year low to the dollar at Kc20.76/$.

"The main but not the only reason behind the crown´s depreciation is the outcome of last Thursday´s (policy) meeting of the CNB (Czech National Bank) Bank Board where the central bankers postponed the exit from the interventions regime until 2016," said Akcenta analyst Miroslav Novak.

"The CNB made it clear that it wants a weaker crown for a longer time," he added.

Regional developments are another reason behind the fall, according to Novak.

"The Polish zloty and the Hungarian forint came under strong selling pressure last week. Moreover, the euro is weakening to the US dollar ahead of Thursday´s meeting of the European Central Bank which multiplies the crown´s losses," said Novak.

Next Finance analyst Marketa Sichtarova said that in the morning the unit was firming, trading near Kc27.60/EUR thanks to good retail sales data for June. According to her, the CNB´s statements are behind the fall.

"Some investors are selling crowns as they lost patience," Sichtarova said. A few bigger deals are enough to influence the shallow market during summer holidays. In the coming days, however, domestic statistics may boost the crown´s development, she said.

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