By: The Quinnipiac University Economics Research Team, Nicholas Ciampanelli
Throughout August 2021, the exchange rates of Central and Eastern European currencies experienced a variety of changes throughout the month, with most experiencing general declines in their value, as related to the Euro. Weakening currencies were predominantly the Czech Koruna (CZK), the Polish Zloty (PLN), and the Romanian Leu (RON), often closing at rates equivalent to their monthly maximum. Contrary to this, the Hungarian Forint’s exchange rate declined in a near-linear fashion, significantly increasing its value.
Starting with the Czech Koruna, this currency opened the month at an exchange rate of CZK 25.476 and progressively declined, continuing its downward trend from the previous month. The currency’s exchange rate continued falling until August 10th, when it reached an absolute minimum value of CZK 25.382. Following this, the exchange rate continuously climbed, closing the month at its absolute maximum value of CZK 25.566. Given these observations, there was a net change of CZK 0.09, an overall small change in the currency’s exchange rate.
Opposing the changes of the Czech Koruna, the Hungarian Forint’s exchange rate continuously decreased throughout August, which is continuous with its patterns from the previous month. This is evident from the Forint opening at its absolute maximum: an exchange rate of HUF 356.01. This was followed by continuous declines in the currency’s exchange rate, ultimately increasing its value within the market. These changes continued until the end of the month, where the Forint reached its absolute minimum of HUF 348.3. Given these observations, there was a net change of HUF 7.71 throughout the month, which is significant for this currency.
The Polish Zloty’s exchange rate was unique from the previous two currencies, for it experienced several positive and negative changes throughout August. This is evident from the Zloty opening the month at an exchange rate of PLN 4.5562 and continuously increasing for the first half of the month, thereby breaking from its trends in July. This continued until reaching a local maximum exchange rate of PLN 4.5876 on August 12th, resulting in the currency to decline to a local minimum of PLN 4.5605 on August 17th and continue increasing to an absolute maximum of PLN 4.5895 on August 20th. Following this, the currency resumed its decline and closed the month at an exchange rate of PLN 4.5678. Given these variety of changes to the Polish Zloty throughout the past month, there was a net change of PLN 0.0118 to the currency, which is an insignificant change to the currency’s exchange rate.
Lastly, the Romanian Leu’s exchange rate pattern resembles that of the Czech Koruna. This is evident from the currency opening at an exchange rate of RON 4.918 and declining throughout the beginning of the month, continuing its downward trend from the previous month. However, the currency’s exchange rate reaches an absolute minimum on August 9th, totaling RON 4.9134. This is followed by the currency’s strength continuously declining for the remainder of the month, ultimately closing the month at RON 4.9343. Given these observations, there was a net change of RON 0.0163, which is also an insignificant change in the currency’s exchange rate.
Upon reviewing the changes to exchange rates of each CEE currency throughout August 2021, indexing their respective percent changes can better illustrate the impact of these observed behaviors. For the majority of the currencies (the Czech Koruna, Polish Zloty, and Romanian Leu), they experienced minor changes to their exchange rates throughout the month, with each currency weakening by .35%, .25%, and .33% respectively. However, the Hungarian Forint strengthened in August, as evident from its exchange rate falling by -2.17%.