CEE MARKETS-Forint, zloty extend gains after central banks rate hike

Band Krisztina Than and Alan Charlish

BUDAPEST/WARSAW, March 9 (Reuters) – Hungarian forint EURHUF= jumped nearly 2% on Wednesday, rebounding from record lows reached earlier this week, as new data, which showed inflation at 8.3%, fueled expectations of further interest rate hikes.

The Polish forint and zloty EURPLN= already started to rebound on Tuesday after sharp falls after the Polish and Hungarian central banks raised interest rates, bringing some relief to currencies battered by rising economic concerns following Russia’s invasion of Ukraine .

A Budapest dealer said panic in the market had subsided and inflation data also helped the forint’s gains.

“The market is now looking for a new kind of equilibrium,” he said.

Poland’s central bank raised its benchmark rate on Tuesday, although the 75 basis point hike missed some market expectations that had seen chances of a hike of up to 100 basis points.

The National Bank of Hungary (NBH) also raised the top of its interest rate corridor by 100 basis points to 6.4% to create room for further policy tightening. The next move will come on Thursday, when the bank sets the rate on its one-week deposit facility, which is intended to manage short-term market volatility and support the forint.

The forint, which fell to an all-time low of 400 against the euro on Monday, rose 1.82%, trading at 381.80, extending Tuesday’s gains.

Data showed that Hungarian inflation continued to rise in February despite price caps in place on some staple foods, fuel and energy, reflecting strong price pressures in central Europe exacerbated by the war in neighboring Ukraine.

The zloty was also up 2% to 4.843 against the euro, after the bank raised its main policy rate by 75 basis points to 3.5% and substantially raised its inflation forecast due to the economic impact of the war in Ukraine.

Polish central bank governor Adam Glapinski will hold a press conference at 14:00 GMT.

“The press conference (…) will be important as it is expected to outline the outlook for monetary policy in Poland and will likely show strong central bank determination to strengthen the zloty,” Bank Millennium analysts said in a note. .

Elsewhere, the Czech crown EURCZK= added 1.1%.

Most stocks in the region also firmed, with Budapest BUX gaining 4.2%, led by OTP Bank OTPB.BU whose shares jumped 8.6% in a positive correction after recent sharp falls.

prague .PX added 2.3% while Warsaw .WIG20 increased by 2.2%.

CEE MARKETS INSTANTANEOUS At 09:33 CET CURRENCIES Last Previous Daily Change bid Close change in 2022 EURCZK= Czech koruna EURCZK= 25.3800 25.6670 +1.13% -2.00% EURHUF= Hungarian forint EURHUF= 381.8000 388.7600 +1.82% -3.25% EURPLN= polish zloty EURPLN= 4.8430 4.9400 +2.00% -5.20% EURRON= lei in Romanian EURRON= 4.9485 4.9490 +0.01% -0.01% EURHRK= Croatian kuna EURHRK= 7.5650 7.5675 +0.03% -0.63% EURRSD= Serbian dinar EURRSD= 117.5500 117.6500 +0.09% +0.03% Note: daily change calculated from 1800 CET Last Previous Daily Change Close change in 2022 .PX prague .PX 1291.22 1261.6400 +2.34% N / A .BUX Budapest .BUX 43283.60 41515.50 +4.26% -14.66% .WIG20 Warsaw .WIG20 1950.42 1908.10 +2.22% -13.96% .BETI Bucharest .BETI 11816.37 11208.12 +5.43% -9.53% .SBITOP Ljubljana .SBITOP 1063.11 1057.96 +0.49% -15.32% .CRBEX Zagreb .CRBEX 1928.48 1914.42 +0.73% -7.26% .BELEX15 Belgrade .BELEX15 835.76 835.76 +0.00% +1.83% .SOFIX Sofia .SOFIX 548.45 547.27 +0.22% -13.72% Yield Yield propagated Daily (bid) change vs. Bunds change Czech Republic spread CZ2YT=RR 2 years CZ2YT=RR 4.7730 0.0000 +538 bps -2bps CZ5YT=RR 5 years CZ5YT=RR 3.8480 0.0070 +406 basis points +0 basis points CZ10YT=RR 10 years CZ10YT=RR 3.4730 0.0010 +337 basis points +1 basis points Poland PL2YT=RR 2 years PL2YT=RR 5.1170 0.2450 +573 basis points +23 basis points PL5YT=RR 5 years PL5YT=RR 4.9130 0.0000 +513 basis points +0 basis points PL10YT=RR 10 years PL10YT=RR 4.9190 0.0880 +481 basis points +9 basis points CHEEKY 3×6 6×9 9×12 3M interbank Czech Republic CZKFRAPRIBOUR= 4.96 4.96 4.72 4.79 Hungary OYSTERBUBOR= 7.81 7.71 7.51 5.89 Poland PLNFRAWIBOR= 5.76 5.79 5.76 3.91 Note: ENG Quotes are for asking prices ************************************************** **** *********** (Additional reporting by Jason Hovet in Prague; Editing by Rashmi Aich) (([email protected]))

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