Hungarian Forint notes of differing denominations sit on display in Budapest on Nov. 19, 2008. Photographer: Balint Porneczi/Bloomberg News
Dec. 8 (Bloomberg) — The slowing global economy is halting the spread of monetary union into eastern Europe and may lead to another year of losses for the Polish zloty, Hungarian forint and Czech koruna.
The zloty fell 21 percent against the euro from a record high in July as Poland headed for its biggest economic slowdown in almost a decade, while Hungary turned to the International Monetary Fund, World Bank and European Union for a bailout as the forint weakened 15 percent. Koruna volatility almost tripled as it depreciated 12 percent. The two-year mandatory trial period before adopting the euro allows swings of no more than 15 percent.
Poland, Hungary and the Czech Republic joined the European Union in 2004, committing to enter the 10 trillion-euro ($12.7 trillion) economy of countries sharing a single currency. The dream faded since July as the worst global financial crisis since the Great Depression drove investors from emerging markets. Now, New York-based Morgan Stanley and UBS AG in Zurich predict more foreign exchange losses in eastern Europe.
Read moreEuro Dreams Shattered for Poles, Hungarians, Czechs as Currencies Plummet