By: The Quinnipiac University Economics Research Team, Jack French
The last two weeks saw mixed results for the CEE countries. Following a period where rates were falling for all countries, interest rates dropped again with the exception of Hungary. Hungary’s rate rose by a few percent. On the other side of the spectrum, Romania’s rate is ten percent lower than it was two weeks ago. Poland’s rate had a big drop in the first few days and was down nearly twenty percent before steadily rising and settling at only around five percent lower. The Czech interest rate ended up with a very similar drop to Poland but didn’t share the early drop.
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.
The drops in Slovakia and Romania mean that all CEE countries again have interest rates below the irrespective three-month average rates. Czech’s interest rate is well over one standard deviation lower than its historical average. After being nearly one standard deviation higher than its three-month average, Slovakia is now nearly one standard deviation below it but still within the historical bounds. Romania’s has gone from almost exactly its three month average to almost exactly one standard deviation below it. Poland is slightly below its rolling mean after being well below at one point. Hungary meanwhile stayed below its three month average the entire time but never dropped more than one standard deviation below it.