The Czech koruna (CZK), which has been strengthening against the euro since the beginning of 2018, now stands at 25.30 EUR/CZK, the strongest it’s been in the last five years. With the Czech National Bank being expected to raise interest rates as soon as February 2, foreign investors have been buying up the Czech currency in anticipation of better yields compared to the rest of the Eurozone. The National Bank has made no secret of its intention to increase interest rates at a faster pace than last year in an effort to rein in inflation. The anticipated jump this week is expected to see base rate rise by 0.25 percent to 0.75 percent. The Czech National Bank’s inflation target of 2 percent is threatened by rising labor costs.
