Czech crown gains on world markets
Visitors to the Czech Republic may have noticed that their dollars or euros don't go as far as they did even a year or two ago, as the Czech currency - the crown - gets stronger. In fact, says a new report by Bloomberg, the crown has gained the most strength compared to all other currencies in the world over the last year. Financial analyst David Marek of Patria Finance explains why the Czech crown is enjoying such success:
Given the deadlock that has resulted from the recent elections, what effect—if any at all—is this having on the Czech economy?
"I don't see any significant problems from this perspective. This situation is such that the Czech crown could stay at the current level and wait for further developments on the political scene. Looking at the programs of all parties—the left-wing or right-wing of the political spectrum in the Czech Republic—both major parties, the Civic Democrats and the Social Democrats have economic programs that should be quite reasonable for the future of the Czech economy."
"The Czech crown is gaining from the inflow of long-term capital, especially from direct foreign investment. I would say that this is a sound strengthening of the currency without great risk. Compared to the Swedish or the Slovak crown, it is a very similar story. All three economies are growing better than the rest of the European Union, and are based on quite reasonable domestic economic policies."