CEE Interest Rate Report for August 20 – September 02

By: The Quinnipiac University Economics Research Team, Niamh Savage

Source: Eurostat and own calculations. Daily EMU convergence criterion bond yields (i.e., central government 10-year bond yields)

The dominant trend for the central eastern European interest rate index was that most countries saw their yields rise dramatically and then largely normalize over the period. All countries but Slovakia saw an increase in their bond yields. Hungary saw the biggest initial increase with their bond yields increasing by about 25% in only 3 days. Poland and Czechia saw a similar increase during the early part of the period, although their movements were less pronounced. 

Hungary and Slovakia were the two contrasting cases this week. Slovakia’s bond yields declined at the beginning of the period, but they increased after. As of August 29th, all of the countries had a steady interest rate.

Source: Eurostat and own calculations. Daily EMU convergence criterion bond yields (i.e., central government 10-year bond yields). The center line is a rolling three-month average. The upper and lower boundaries are the average plus and average minus one standard deviation, respectively, for the same three-month period.

Relative to their own historical trends, many of the countries remained outside of their historical range. All of the countries have bond yields that seem to persist below their lower bound levels. This suggests that we should continue to see movement in the yields for the countries over the coming weeks as they either return to their means or settle on new levels.