CEE WEEKLY INTEREST RATE ANALYSIS

Weeks of April 1st, 2019 – April 12th, 2019

By Quinnipiac University's Economics Research Team, Bryan Doherty

Source: Photo by M. B. M. on Unsplash

CEE Interest Rates INDEX Analysis

Source: Eurostat and own calculations

The trend for the central eastern European interest rate index was mixed over the previous two weeks. Hungary and Slovakia were the two countries with the greatest variation amongst their interest rates. Hungary’s interest rate increased by 9.82% over the two-week period, while Slovakia’s interest rate decreased by 5.08%. Poland and Romania saw their interest rate increase by approximately 2%, and Czechia posted a decrease of less than 1% in theirs.

HISTORIC RATE Analysis

Source: Eurostat and own calculations. Currencies are each local currency per Euro. The center line is a rolling three-month average. The upper and lower boundaries are the average plus and minus one standard deviation for the same three-month period.

Although Hungary saw their interest rate increase by nearly 10%, it is still within their historical average. The interest rate in Slovakia, on the other hand, has remained below its historical average for the past two weeks. It will be interesting to see if this substantial decrease in their interest rate will stimulate their economy. Since Slovakia uses the Euro, it is more influenced by European Central Bank (ECB) interest rates than the other CEE countries analyzed here. As the ECB pushes their rates negative to stimulate European economies, we would expect to see an effect first in Slovakia among the CEE countries we look at.

THE DATA: Interest Rates by Country

Source: Eurostat and author’s own calculations