CEE Interest Rate Report for September 30 – October 12

Updated: Feb 24

By: The Quinnipiac University Economics Research Team, Niamh Savage

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). Interest rates in Slovakia declined by over 10% at the beginning of the period, and then it showed a strengthening of about 15%. At the end of the period, the Slovakian interest rates had declined by about 18%. The Romanian Leu (yellow line) showed the least variation in percentage terms relative to other regional currencies; it did not end with a strengthening of their currency to the Euro, but it declined by the least.

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


Historical Analysis

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, many of the returns showed a decline, suggesting an increase in demand for their bonds and increase in prices. Relative to their own historical trends, Romania, Slovakia, and Czech kept their interest rates within their historical boundary. The Hungarian interest rate fell below the lower boundary in the middle of the period, but it ended above their lower historical boundary. Poland began in their historical range, but their interest rate fell, and remained, below their lower historical boundary.

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