The Czech crown could lead some Central European currencies higher in the next 12 months if the country's central bank decides to abandon its cap on the currency, a Reuters poll showed on Thursday. The median forecast in the poll, taken this week, sees the zloty firming 1.9 percent against the euro relative to Wednesday's close by end-October 2017.
The leu could gain 0.7 percent while the dinar could shed 1.4 percent. The median forecast for the crown was 26.885 versus the euro. But only half of the 12 analysts who gave forecasts for the next 12 months see the central bank removing its cap which has kept the crown on the weaker side of 27 since 2013.
One forecaster saw it surging to 25.50 by end-October next year. The bank has a "hard commitment" to keep the cap at least until the second quarter of 2017 and has said it expects to abandon it in mid-2017. All 14 forecasts for the 6-month crown rate in the poll reflected an expectation the cap would still exist at the end of April, despite a strengthening of the crown rate implied by 6-month forward trades.
The surge of the implied rate to beyond 26.8 per euro last month indicated expectations the cap would be removed. Analysts have said a quicker than expected rebound in inflation could allow a relatively early cap exit, while further monetary loosening by the European Central Bank could lead to a later exit.