Dec. 13 (Bloomberg) -- The koruna erased gains after Fitch Ratings cut the Czech Republic’s outlook to “stable” from “positive.”
The Czech currency weakened less than 0.1 percent to 25.661 per euro at 5:08 p.m. in Prague after earlier strengthening as much as 0.5 percent. The PX index of stocks closed 0.2 percent higher at 862.2 before the Fitch statement.
Fitch, which reaffirmed the country’s A+ assessment, said the outlook revision reflected the deterioration of the growth outlook in the euro area, the Czech Republic’s main trading partner.
Czech gross domestic product growth “has already slowed to a virtual standstill,” Michele Napolitano, a Fitch director, said in a statement. “The 2012 deficit is likely to slightly overshoot the government’s forecast, given an optimistic growth assumption.”
The koruna strengthened earlier today after a Czech central banker said further interest rate cuts wouldn’t help the economy and a report showed that investor confidence in Germany improved.
--With assistance from Linda Shen in New York. Editors: Linda Shen, Peter Branton
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