Nomura Holdings: Czechia at risk of currency crisis

Czechia, Romania and Hungary face the risk of exchange-rate crises over the next one year as fiscal and external challenges mount, according to Nomura Holdings Inc. The warning is based on analysis of eight indicators including FX reserves import cover, real short-term interest rates, as well as fiscal and current account measures, according to Nomura’s Damocles Index which assessed 32 emerging markets’ vulnerability to a currency crisis. Hungary’s forint is among the worst-performing emerging market currencies this year after a hold up in recovery funding from the European Union. The currencies of Romania and Czechia have also declined more than 8% against the dollar, the report says.