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Czech currency weakens as coronavirus fears cause global financial crash

Markets fear an increased risk of recession

editor: REMIX NEWS
author: Czech News Agency

Since Thursday morning, the Czech koruna has been weakening compared to both the euro and U.S. dollar after U.S. President Donald Trump banned all flights from Europe to the U.S. due to coronavirus infection.

The ban will apply for a month starting on Friday.

“Markets fear that this step significantly increases the risk of a global recession in the near future. They are getting rid of risky assets, including the Czech currency,” says Lukáš Kovanda, chief economist of the Czech Fund.

“About 100 thousand flights between the U.S. and Europe take place over the Atlantic every month. If more than 90 percent of these flights are now canceled, it means a serious paralysis not only of related sectors such as air transport and tourism but also for the global economy, in which the transatlantic transport plays an essential role,” says Kovanda.

Kovanda says that the ban does not apply to Britain and Ireland.

The 30-day restriction to slow the spread of coronavirus in the U.S. will apply from Friday midnight. It concerns 26 European countries, including the Czech Republic, and, according to Reuters, does not apply to U.S. citizens, their closest relatives, and permanent residents of the U.S.