Czech koruna  saw its lowest points in more than two years, with a peak of CZK 25.5 per euro. Domestic economic statistics and vice-governor of the Czech National Bank (CNB), Jan Frait, expressed doubts about the future of interest rates, which contributed to this decrease. The CNB recently lowered interest rates, but the instability of the world financial markets hasn't stopped the crown from stabilising recently. The koruna's prospects have also improved due to declining inflation.

IIn addition to the Reuters survey, the CNB's own projections, which foresee an average exchange rate of CZK 25 per euro for the upcoming year—a little higher than Reuters' prediction—also point to a strengthening of the currency. Concurrently, the CNB's prediction and the average rate estimated by the Czech Banking Association (ČBA) for the upcoming year are nearly identical at CZK 24.70. 

Raiffeisenbank analysts are likewise upbeat about the future of  the Czech currency. According to one analyst, "the bolder steps of other central banks and the delayed recovery abroad should help koruna to return to stronger values this year," as reported by the Czech media outlet Seznam Zprávy.  Jaromír Gec, an economist at another Czech Bank Komerční banka, told Reuters earlier this year that "the main reason for the expected strengthening of koruna will be the gradual revival of domestic economic activity this year."

In summary, a stable and expanding economy, a high demand for exports, a strong central bank with sound monetary policies, substantial foreign exchange reserves, current account surpluses, political stability, low rates of inflation, alluring interest rates, and a high degree of confidence and trust in the currency among both domestic and foreign investors can all contribute to a strong national currency.

Source: https://www.expats.cz/

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