Low dollar generally favourable to Czech economy

14-12-2004

From an all time high of 42 CZK in 1997, the value of the US dollar against the Czech crown has been plummeting in the last year or so. The mighty greenback is now only worth around 23 CZK.

One would assume that this would hit Czech exporters hard, but not so says General Director of the Czech Export Bank, Josef Tauber

His organisation supports Czech companies exporting goods to other countries and he is not unduly worried about this turn of events

"I have to say that 85% of Czech exports go to Western Europe where the currency used is the Euro. If there is a problem as far as the weak dollar is concerned it is in terms of Czech exports to the rest of the world - the countries of the former Soviet Union, the Far East, etc. They pay in dollars"

On the other hand Mr Tauber does admit that the exporters selling goods to territories whose currency is pegged to the dollar will have to be careful.

"Well I imagine that if the weak dollar continues there will be problems for our weaker clients. The Czech crown is a free currency, which can move in any direction. This is a time where everybody should think over what they are doing and to try to survive."

On the whole though, the low dollar is beneficial for the Czech economy. Oil and commodities such metals and other minerals are a lot cheaper to import and this is good for Czech manufacturers.

It also good news for Czech consumers, especially in the run up to Christmas, as IT and electronic goods produced in the States are now a lot cheaper for Czechs. Those planning to cross the Atlantic will also be extremely happy with the favourable exchange rates.