BUDAPEST, June 15 (Reuters) - Hungary"s forint
eased further against the euro on Tuesday after a central banker
was quoted as saying that the bank would probably embark on
quarterly rate hikes.
Gyula Pleschinger was quoted by Bloomberg on Monday as
saying that the central bank may scrap the one-week deposit
facility, which he said was a temporary tool to navigate market
volatility, a situation that he said Hungary had now passed.
However, Pleschinger later told the website portfolio.hu
that the facility would not be phased out, apparently walking
back from his earlier comments.
The remarks triggered a turnaround in the forint, which had
firmed to more than nine-month-highs versus the euro after
Deputy Governor Barnabas Virag said last month the central bank
would start tightening monetary policy to tackle inflation.
"The forint eased substantially yesterday due to heightened
uncertainty over the central bank"s policy toolkit but the
(Polish) zloty has now also followed suit," analysts at Erste
Investment said in a note.
The bank meets next Tuesday to discuss interest rates and
will also publish updated economic forecasts. A rate rise would
make it the first central bank in the European Union to start a
tightening cycle since the coronavirus pandemic.
The zloty and the forint both eased 0.3% versus
the euro by 0912 GMT.
"At next week"s Hungarian central bank meeting not just the
size of the rate increase will be worth looking at but also
whether the effective central bank policy tool, currently the
one-week deposit, and its maturity change," Erste said.
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