5 Euro – Slovakia

In 2023, Slovakia's currency situation was defined by its continued use of the euro, which it adopted in 2009. As a member of the Eurozone, the country's monetary policy was set by the European Central Bank (ECB), which spent the year aggressively combating high inflation across the bloc. The ECB's successive interest rate hikes aimed to cool the economy and bring down price growth, which also peaked in Slovakia at levels slightly above the Eurozone average, driven primarily by high energy and food costs. Consequently, the Slovak koruna was a historical footnote, with all domestic prices, wages, and financial transactions conducted in the common European currency.

The year was marked by significant economic and political pressures related to currency-area membership. While the euro provided stability and shielded Slovakia from volatile currency fluctuations, it also meant the country had no independent monetary tools to address its specific economic conditions. The tight monetary policy from Frankfurt helped gradually lower inflation from its peak, but it also increased borrowing costs, slowing economic growth and investment. This tension was a key point of domestic debate, particularly as the government, led by Prime Minister Ľudovít Ódor and later Robert Fico, navigated the need for fiscal consolidation while managing public discontent over the cost-of-living crisis.

Looking externally, the euro's exchange rate against major currencies like the US dollar experienced volatility, influenced by the ECB's policy divergence with the Federal Reserve and global uncertainty. For Slovakia, a small, open, export-oriented economy (notably in the automotive sector), a weaker euro during parts of the year provided a competitive boost for its key industrial exports. Overall, the 2023 currency narrative was one of navigating the trade-offs of Eurozone membership: enjoying the benefits of a stable, strong currency while managing the one-size-fits-all policy constraints during a period of economic adjustment and heightened inflation.