The Czech National Bank’s governing council is expected to reduce its base rate by another 50 bps at an upcoming meeting this week. That’s the expectation of multiple economists contacted by the Czech News Agency. They warned that the bank’s good intentions were unlikely to do a lot to kick-start the economy but said the bank was likely under too much pressure from a variety of factors not to do its part to help a bad situation. The result, however, could be a continuation in the weakening of the national currency. Before the virus reached Europe, the koruna was threatening to strengthen to less than CZK 25 per euro. This has since slipped to CZK 28, with occasional periods of time in which it looked likely to drop into the CZK 29 range. The currency volatility is hurting companies who import goods at euro prices but pay in koruna, or who borrowed in euro.
