PRAGUE: The Czech crown and Polish zloty are expected to lead central European currencies higher in 2021 as the region recovers from the coronavirus pandemic, a Reuters poll showed.

Central Europe’s currencies jumped in November amid a global rally fuelled by vaccine hopes. The crown posted its largest monthly gain since 2009 and the zloty had its best month since 2012.

The two are seen gaining more into 2021, boosted by a recovery from the harsh economic hit this year from the pandemic. The Hungarian forint was expected to edge up, while Romania’s leu should weaken.

Analysts forecast the crown to firm 2.3% from its last week close over the next 12 months, to 25.80 to the euro. The currency gained 3.7% in November but has retreated from a three-month high of 26.118 hit preceding week.

“Barring a further pandemic deterioration, many factors should give the green light for a moderate appreciation of the crown in 2021,” Melanie Fischinger, an FX and emerging markets analyst at Commerzbank, said.

“The (Czech National Bank) is likely to consider a renewed increase in key interest rates ahead of other national banks. This is an important argument for the crown to appreciate moderately.”

In Poland, the zloty was seen gaining 2.4% to 4.37 to the euro, coming after a nearly 3% rise in November.

“We expect sunnier times for the zloty next year,” Piotr Bartkiewicz of Pekao said. “We believe it will strengthen visibly... on the back of global economic recovery.”

Lagging behind was the forint, expected to edge up 0.5% to 358.00 to the euro in the coming year.

Hungary, along with Poland, has been locked in a dispute with the European Union over linking funds from the bloc’s budget and recovery fund to the rule of law.

CIB analyst Mariann Trippon said political risk weighed more heavily on the forint and it was unlikely to strengthen much next year given that Hungary’s economy policy is aimed at operating with a weak but stable exchange rate.

Romania’s leu was also forecast to shed 1.6% to 4.95 to the euro in the coming 12 months.

“The upcoming elections should bring some political clarity but needed fiscal consolidation won’t be easy so we expect a modest depreciation,” analyst Jakub Kratky, at Generali Investments CEE, said.