Annual Report 2023

Group Management Report

Exchange rate, interest rate and commodity price trends


In 2023, the euro appreciated slightly against the US dollar on an annual average. This followed a prior year in which the euro had been relatively weak due to the high uncertainty surrounding developments in the global economy. The euro also appreciated slightly against sterling on an annual average basis. Changes in the euro against the currencies of the emerging markets were mixed. In particular, the Argentinian peso and Turkish lira lost value against the European single currency due to the persistent, extremely high rates of inflation. Against the Brazilian real, the euro’s value was virtually unchanged on an annual average. By contrast, the Mexican peso was on average significantly stronger against the European single currency than in the year 2022. The Chinese renminbi, the currencies of several emerging markets in Asia, and the South African rand depreciated against the euro year-on-year. For 2024, we expect the euro to appreciate slightly against the US dollar and to remain at a similar level against sterling as in the reporting year. We assume that the Chinese renminbi, Brazilian real, Mexican peso, South African rand and Turkish lira will depreciate to varying degrees. Due to the difficult economic situation in Argentina and the uncertainty following the presidential election, the Argentinian peso is expected to depreciate sharply. For 2025 to 2028, we expect that the euro will be stable against the key currencies, while the comparative weakness of the currencies in the aforementioned emerging markets will probably continue. However, there is still a general event risk, defined as the risk arising from unforeseeable market developments.


The turnaround in monetary policy, which began in many countries in 2022 due to the persistently high inflation rates – partly as a result of the Russia-Ukraine conflict – continued in the reporting year. Global interest rates rose further in fiscal year 2023. National central banks in nearly all of the major Western industrialized nations made corresponding adjustments to their key interest rates to further moderate the in some cases persistent and comparatively high rates of inflation. Interest rates were also raised in many emerging markets. Whether there will be further changes in key interest rates in 2024 in the respective countries will depend firstly on the development of inflation and secondly on the scale of a possible economic downturn. Overall, we expect a relatively slight increase in interest rates on average in 2024 compared to 2023. For the years 2025 to 2028, we estimate that interest rates will persist at a relatively high level.


Following a year of relatively high volatility and price increases for many raw and input materials in 2022 due to the Russia-Ukraine conflict, the commodity markets largely eased in fiscal year 2023. Overall, commodity prices were at a lower level compared with 2022. Compared with the previous year as a whole, the average prices for the commodities coking coal, cobalt, lithium, crude oil, nickel, aluminum and natural rubber fell significantly. The average decline in prices for the commodities copper and lead were less pronounced by comparison. Averaged over the year, the prices of the precious metals rhodium and palladium also recorded a significant decline, while the price of platinum remained stable compared with the prior year. For 2024, we expect prices for some commodities to continue to fall due to the technological transformation and as a result of surplus supplies. For the majority of commodities, however, we expect prices to rise given the anticipated recovery in the global economy. We anticipate continued volatility in the commodity markets for the period from 2025 to 2028.