The exchange rate of the koruna remained almost unchanged, the CNB board meets on Thursday

Commercial presentation Update: 30/04/2024 17:22
Issued by: 30/04/2024, 17:22

Prague – The exchange rate of the koruna remained almost unchanged on Tuesday. Against the euro, the Czech currency strengthened by a penny to 25.15 CZK/EUR compared to Monday’s close. On the contrary, it weakened by a penny against the dollar, at 17:00 it traded at 23.49 CZK/USD according to the server Patria Online. On Thursday, the banking board of the Czech National Bank (ČNB) meets, which will decide on the setting of the interest rate. The Prague Stock Exchange weakened, Moneta shares dragged it down.

Analysts expect the CNB board to cut the key interest rate by half a percentage point to 5.25 percent. “However, the market is no longer so convinced of a further reduction according to the original scenario. It is clear from the statements and speeches of individual central bankers, including Governor Aleš Michl, that they are rather inclined to reduce the interest rate more slowly at the next monetary policy meetings of the Bank Board,” said Purple Trading analyst Jaroslav Blunt.

According to him, the slower reduction is also indicated by the still high inflation in services and, above all, the cautious attitude of the American central bank, the Fed and the European Central Bank. In the case of the US Fed, the original scenario of four interest rate cuts this year has changed to just two cuts, and there are even voices that there might not be an interest rate cut in the US this year at all. “The Crown is satisfied with the clearly stated situation,” Tupý pointed out.

The Czech Statistical Office reported that the Czech economy grew by 0.4 percent year-on-year in the first quarter of this year. Compared to the last quarter of last year, the gross domestic product (GDP) increased by 0.5 percent. “Today’s GDP confirmed that the Czech economy is growing, even though interest rates are still high and inflation, according to assumptions, has reached its inflation target, i.e. two percent. The pressure to weaken the koruna will therefore significantly weaken and the koruna can thus maintain its stronger positions ,” added Tupý.

The Prague Stock Exchange did not follow Monday’s growth and weakened, the PX index lost 0.12 percent to 1548.85 points. Even though most stocks did well, including ČEZ, Komerční banka and Erste, the index was mainly driven down by the shares of Moneta and also the insurance company VIG. This follows from information on the stock exchange’s website. The market will reopen on Thursday due to the public holiday.

“The Prague Stock Exchange did not maintain Monday’s positive trend and weakened. While the shares of ČEZ, Erste and Komerční banka tried to keep the stock market in positive numbers, practically only the shares of Moneta with the contribution of VIG pulled it down,” said Wood & Company broker Lukáš Novotný.

Moneta’s securities lost 2.36 percent today and closed trading at CZK 95.10. VIG shares lost 0.81 percent to 734 crowns.

Other major titles rose or stagnated. Emissions from the energy company ČEZ increased by 0.64 percent to CZK 870. Today, the Czech Republic received permission from the European Commission for public financial support for the construction of a new nuclear unit in Dukovany. At the same time, the deadline for the submission of a binding offer for the construction of up to four nuclear reactors in the Czech Republic, submitted by the French EDF and the Korean KHNP, has expired.

Erste shares initially weakened by more than 1.7 percent after the first quarter results were published today, but gradually corrected losses for the rest of the day. Finally, they closed stronger by 0.23 percent at CZK 1,110.

Komerční banka’s shares also finished in the positive, rising by 0.52 percent to CZK 869.50. Issues of the Colt arms company gained 1.41 percent to CZK 649, and Photon Energy securities gained 0.9 percent to CZK 44.90.

Philip Morris shares ended trading unchanged at CZK 16,000. The general meeting of the company decided that the company will pay a dividend of CZK 1,220 per share for last year. For the previous year, shareholders received 1,310 crowns. Last year, the tobacco company’s net profit fell by eight percent year-on-year to CZK 3.3 billion.

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