A recent report from news agency Reuters has revealed that the Czech crown will be the only currency in Central Europe to strengthen in the next 12 months. This development is because other currencies in the region face persistent stability risks or have limited room for growth. The crown currently stands at EUR 1: CZK 25.38. Analysts believe that it could drop below CZK 25 in the third quarter of this year, potentially dipping as low as CZK 23.4 by December or early 2025. The next couple of months will see it hover around CZK 25.3 as the economy continues its gradual recovery from 2023 levels.

"The main reason for the expected strengthening of the crown will be the gradual revival of domestic economic activity this year," Komerční banka economist Jaromír Gec told Reuters. In addition, a high foreign trade surplus can also positively support the domestic currency. According to data from the Czech Statistical Office released Monday, the surplus in February amounted to CZK 34.6 billion – CZK 19.7 billion more than the year before.

Source: Reuters

Prepared by the CzechTrade London team.