CEE Interest Rate Report for May 29 – June 12

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)


Throughout this time period, there was a decline in the interest rates of all CEE currencies. The greatest variation, in percentage terms, was in Slovakia, and they had the largest decline in interest rates (pink line). This is consistent with the two prior week’s findings, so this is still the country to watch. However, their declining trend ended on June 7th, and their interest rates began to increase on June 10th. The Romanian Leu (yellow line) showed the least variation in percentage terms relative to other regional currencies; it did not continue to show a strengthening of their currency to the Euro, but it declined by the least.


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.


Throughout this time period, all of the returns showed a decline, suggesting an increase in demand for their bonds and increase in prices. Relative to their own historical trends, Hungary was the only country that kept their interest rates within their historical boundary. The Romanian and Czech interest rate fell below the lower boundary by the end of the period. The Slovakian and Polish interest rate remained outside of their historical range throughout the time period, remaining persistently at their lower bound levels for bond yields. This suggests that we should continue to see movement in the yields for Poland and Slovakia over the coming weeks as they either return to their means or settle on new levels.

  • LinkedIn Social Icon
  • White Facebook Icon

Copyright © 2020 InvestCEE, All rights reserved.