You’ve probably seen the numbers ticking up on your currency app lately. As of mid-January 2026, the US dollar to Czech koruna exchange rate is hovering around 20.95 CZK. It’s a noticeable shift from the start of the year when we were looking at roughly 20.55 CZK.
Why does this matter? Well, if you’re an American expat living in Prague or a Czech business owner importing tech from the States, these small decimals lead to massive price differences. Honestly, the "stable" koruna we saw throughout 2025 is starting to feel a bit more volatile.
What’s Pushing the Dollar Up?
The US dollar remains a bit of a powerhouse, even with the global economy cooling. In early 2026, several factors are keeping the greenback resilient. Investors are still looking at the US as a safe harbor, especially with uncertainty in other major markets.
In the Czech Republic, the story is a bit more nuanced. The Czech National Bank (CNB) has been holding its key interest rate steady at 3.5%. Governor Aleš Michl and the rest of the board have been incredibly cautious. They’re stuck between a rock and a hard place: inflation is dropping—hitting around 2.1% in late 2025—but services are still getting more expensive.
Basically, the CNB doesn't want to cut rates too fast and risk inflation bouncing back. But by keeping rates high, they’re trying to keep the koruna attractive. Despite this, the dollar has gained nearly 2% against the koruna in just the first two weeks of January.
The New Government Factor
Politics always plays a role in currency. The new Czech government coalition has signaled a move toward "fiscal loosening." In plain English? They want to spend more.
Analysts at Oxford Economics recently noted that they expect the Czech budget deficit to hit roughly 3.5% of GDP because of these spending plans. Markets usually get a bit twitchy when a government increases its debt, which can put downward pressure on the local currency. This is part of why the koruna hasn't been able to fight off the dollar's recent climb.
Real-World Impacts: It’s More Than Just Numbers
If you’re traveling to Prague this spring, your dollar is going to go a little further than it did last year. A beer that costs 65 CZK used to be about $3.15; now it’s closer to $3.10. It sounds small until you're paying for a hotel or a lease.
- For Travelers: You're getting a "discount" on everything from trdelník to tours of the Prague Castle.
- For Investors: Czech bonds are becoming a tricky play. With yields on 10-year bonds expected to breach 5%, there's a lot of debate on whether the risk is worth the reward.
- For Businesses: Czech manufacturers who export to the US are actually in a good spot. Their goods are cheaper for Americans to buy, which could boost the Czech trade surplus.
Inflation and Your Wallet
Even though the exchange rate favors the dollar right now, don't forget that prices inside Czechia have shifted. While energy prices have dropped (thanks to some government subsidies and lower global gas prices), the cost of eating out or getting a haircut is still high. Real wages in the Czech Republic are growing at about 5.5%, which keeps people spending, but also keeps service prices from falling too far.
Expert Forecasts: Where Do We Go From Here?
It’s always a bit of a guessing game, but most chief economists at major Czech banks (the ones who form the Czech Banking Association panel) expect the koruna to stay somewhat stable for the rest of 2026.
The consensus seems to be that the US dollar to Czech koruna rate will settle around 20.50 to 21.00 CZK for the first half of the year. However, if the US Federal Reserve decides to cut rates later in 2026, we could see the dollar weaken, pushing the rate back toward the 19.00 CZK range.
David Havrlant, Chief Economist for the Czech Republic at ING, suggests that while Central and Eastern European currencies started the year strong, the gains won't be "spectacular." The koruna is expected to "outperform" expectations, but only if the domestic growth story stays on track.
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A Critical Look at the Risks
Nothing is guaranteed. If the war in Ukraine escalates or if German industry—which is the Czech Republic's biggest trading partner—takes another hit, the koruna could slide. The Czech economy is deeply tied to the German automotive sector. If German factories slow down, the koruna usually follows.
Actionable Steps for Managing Your Money
Whether you're holding dollars or korunas, you can't just set it and forget it in this environment.
- Use Limit Orders: If you need to exchange a large amount of money, don't just take the "market rate" on a Tuesday afternoon. Use a currency broker that allows you to set a target price. If the dollar hits 21.10 CZK, your trade triggers automatically.
- Watch the CNB Meetings: Mark February 5, 2026, on your calendar. That’s the next big monetary policy meeting for the Czech National Bank. If they hint at a rate cut earlier than summer, expect the koruna to weaken.
- Hedge for Business: If you're running a company, talk to your bank about forward contracts. You can lock in today's rate for a transaction six months from now, protecting yourself from a sudden spike in the dollar.
- Diversify Your Cash: Don't keep all your eggs in one basket. If you live in Czechia but get paid in USD, keeping a healthy balance of both currencies can help you weather the fluctuations.
The relationship between the dollar and the koruna is a tug-of-war between US global dominance and Czech domestic resilience. For now, the dollar has the upper hand, but with the CNB standing firm on interest rates and the Czech economy growing at a steady 2.4%, the koruna isn't going down without a fight. Keep an eye on the inflation data coming out of Prague each month; that’s the real signal for where the exchange rate is headed next.