Forint stable ahead of key cenbank meeting


Article content

BUDAPEST — The Hungarian forint held

steady ahead of a watershed central bank meeting later on

Tuesday where policymakers are expected to raise the base rate,

becoming the first to tighten policy in the European Union as

the economy recovers from the pandemic.

“A 30-basis point hike to 0.9% and raising the one-week

deposit rate to the same level will move the forint moderately

as it has already been priced in. A bigger hike, for example, to

1%, could bring bigger moves,” a trader in Budapest said.

“Clear communication about the frequency of the planned rate

hikes could help calm markets.”

The uncertainty about the size of the first rate hike in

nearly a decade has concerned investors and caused wide swings

in the forint’s exchange rate since a central banker first

flagged the rate hike on May 17, analysts and traders have said.

The forint was unmoved on the day, trading at 354

per euro.

A Reuters poll of analysts forecasts a 25-basis point hike

of the base rate, however, forecasts range from 15 to 30 basis

points.

The overwhelming majority of analysts also expects the NBH

to raise its one-week deposit rate by 15 basis points to

0.9% from 0.75% by the end of this month, which would bring it

broadly in line with the prevailing base rate.

Article content

The one-week deposit facility is currently the main policy

tool used by the National Bank of Hungary.

The Czech National Bank is also expected to raise its base

rate at its Wednesday meeting. A Reuters poll forecasts a 25

basis points hike.

The Czech crown slid 0.13% to trade at 25.550 per

euro.

Elsewhere, the Polish zloty weakened 0.21% to

4.5375 per euro, while the Romanian leu edged down

0.06% to 4.9257.

Stocks in the region were mixed, with Budapest up

0.3% while Warsaw slid 0.25%. Prague was 0.06%

lower, while Bucharest eased 0.14%.

CEE SNAPSHOT AT

MARKETS 1023

CET

CURRENCI

ES

Latest Previou Daily Change

s

bid close change in 2021

EURCZK= Czech 25.5500 25.5160 -0.13% +2.66%

crown

EURHUF= Hungary 354.0000 354.000 +0.00% +2.46%

forint 0

EURPLN= Polish 4.5375 4.5280 -0.21% +0.48%

zloty

EURRON= Romania 4.9257 4.9226 -0.06% -1.23%

n leu

EURHRK= Croatia 7.4968 7.4990 +0.03% +0.68%

n kuna

EURRSD= Serbian 117.4600 117.575 +0.10% +0.09%

dinar 0

Note: calculated from 1800

daily CET

change

Latest Previou Daily Change

s

close change in 2021

.PX Prague 1165.27 1165.95 -0.06% +13.45%

00

.BUX Budapes 48525.44 48379.6 +0.30% +15.24%

t 2

.WIG20 Warsaw 2213.94 2219.45 -0.25% +11.59%

.BETI Buchare 11592.07 11608.1 -0.14% +18.22%

st 8

.SBITOP Ljublja 1137.95 1138.83 -0.08% +26.32%

na

.CRBEX Zagreb 1981.15 1981.15 +0.00% +13.91%

.BELEX1 Belgrad <.belex15 e>

.SOFIX Sofia 555.50 557.84 -0.42% +24.13%

Yield Yield Spread Daily

(bid) change vs change

Bund in

Czech Republic spread

CZ2YT=R 2-year s

CZ5YT=R 5-year s

CZ10YT= 10-year s

Poland

PL2YT=R 2-year s

PL5YT=R 5-year s

PL10YT= 10-year s

FORWARD

3×6 6×9 9×12 3M

interba

nk

Czech

Hungary

Poland

Note: are for ask prices

FRA

quotes

*********************************************

*****************

(Reporting by Anita Komuves; editing by Uttaresh.V)



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