CEE Interest Rate Report for August 27 – September 8

By: The Quinnipiac University Economics Research Team, Michael Szwaja

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

Massive interest rate movement in Slovakia distorts the graph for the remaining Central European countries here. Slovakia showed substantial movement with a steep decline leading into an abrupt spike on September 1st. Czech, Hungary, and Poland experienced steady increases of their respective rates. Romania was the only CEE county to see a decrease, with its interest rates falling approximately 7.5%.

HISTORICAL TRENDS

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.

All CEE countries remained fairly steady over the two-week period with relatively small fluctuations. Czech stood out by being considerably more than one standard deviation higher than its three-month average while Romania was the only country whose interest rate dipped below its rolling average. Hungary and Poland are both nearly one standard deviation higher than their respective three-month averages. Conversely, the interest rates of Slovakia fell nearly one standard deviation below their three-month averages. All countries saw their most significant changes occur during the middle of the period and were pretty flat over the last few days.