By: The Quinnipiac University Economics Research Team, Jack French
Massive interest rate movement in Slovakia distorts the graph for the remaining Central European countries here. The rate in Slovakia not only fell but turned negative. Czech’s rate fell nowhere near as much as Slovakia’s but still showed substantial movement. Hungary’s rate ticked up slightly. The interest rates in Poland and Romania were largely unchanged. Poland’s rate ended the two weeks very slightly higher while Romania’s was a little lower. Though it’s not a huge increase, climbing interest rates in Hungary is a bit of a surprise in the context of the other CEE countries and the current economic conditions.
Slovakia’s tumbling interest rate turned negative and ended more than one standard deviation its three month average. Czech and Romania are also currently more than one standard deviation below their respective rolling averages. Romania’s interest rate fell by a whole percentage point on June 18th but went back to four the following day. Czech’s was flat until around June 18th when it entered a downtrend. Poland is hovering within its historical range but on the low end of it. Hungary is the exception currently as it is the only country whose interest rate is above its three month average. Interest rates are mostly staying low in Central Europe so Hungary may prove to be an outlier destined for a future cut or a signal that other countries could expect to see a rate hike soon.