BUCHAREST, June 9 (Reuters) - The Hungarian forint led gains
among central and eastern European currencies on Wednesday as
the central bank bolstered expectations of a rate hike later
this month, while the Polish zloty was also firmer ahead of a
central bank meeting.
Hungary"s central bank pledged to launch a decisive
tightening cycle at its June 22 meeting to tackle inflation
risks, its governor said on Wednesday.
A hike would make Hungary the first European Union country
to start raising rates, but it could soon be followed by the
Czech central bank as the region"s inflation rates are the
highest in the EU with economies recovering quickly from the
pandemic.
By 1000 GMT, the forint was up 0.4% against the
euro at 347.1500. The Polish zloty and the Czech crown
were each up 0.2%.
Poland"s central bank is expected to leave its main interest
rate unchanged at 0.1% at its rate-setting meeting on Wednesday,
although inflation stood well above target at 4.8% in May.
While central bank governor Adam Glapinski has previously
said that rates are likely to remain on hold until 2022, some
economists now expect a rate hike this year.
"The MPC"s wording might become increasingly restrictive,
for example by stating that inflation risks are to the upside or
that rate hikes might have to be debated over the coming months
rather than in mid-2022," Commerzbank said in a note.
"We nonetheless remain cautious: even in case of a symbolic
rate hike the real interest rate will remain clearly in negative
territory over the coming quarters and will prevent a
sustainable appreciation trend of the zloty medium-term."
Elsewhere in the region, the Romanian leu was flat
on the day. Analysts expect Romania"s central bank to keep rates
on hold at 1.25% throughout this year. Policymakers expect
inflation at 4.1% in December, above their 1.5-3.5% target.
Stocks in the region were mixed, with Bucharest"s bluechip
index up 0.6% and Prague"s equities 0.3% higher.
Budapest"s was down 1.4% and Warsaw"s inched
0.2% lower.
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