CEE MARKETS-Zloty falls after c.bank holds rates, weak sentiment weighs

  • 9/9/2021
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PRAGUE, Sept 9 (Reuters) - Poland"s zloty slipped on Thursday after the country"s central bank left rates unchanged, while most other central European currencies were muted on weak global sentiment stemming from worries over the pace of economic recovery. The zloty has lagged peers in the Czech Republic and Hungary, where central banks have already tightened policy to battle inflation as economies recover from the blow of the COVID-19 pandemic. Poland"s central bank left interest rates unchanged in a decision coming after trading hours on Wednesday, despite inflation surging to a two-decade high. The country"s central bank Governor Adam Glapinski, who had said raising rates would prove risky, is due to speak at a news conference later on Thursday. Some in the market, though, see chances the bank may move to raise rates as early as November with inflation building. "The governor has been reluctant to raise rates quickly, but recent months have shown that inflationary realities are moving in a different direction than he has previously assumed," ING said. On Thursday, the zloty had fallen almost half a percent to 4.532 to the euro by 0903 GMT, its weakest level so far in September. The Hungarian forint also slipped 0.45% to 351.50 to the euro. Hungary"s central bank is determined to curb price growth as a jump in inflation poses a threat to economic recovery, Deputy Governor Barnabas Virag said in an interview published by newspaper Vilaggazdasag on Thursday. Eyes were also on the European Central Bank, which has looked past a rise in inflation but which may claw back some stimulus on Thursday. Central European stock markets lost up to half a percent. The Czech crown bucked some of the weakening, holding steady around the 25.400 per euro level that it has clung to so far in September. Markets are counting on a further interest rate rise later this month, and some have speculated it could be bigger than a standard 25-basis-point move. "The discussion about larger rate hikes is not likely to die down," Commerzbank said in a note. On debt markets, Hungary auctioned 5-, 10- and 20-year bonds, selling more than the offer, with yields up from the previous auction. CEE SNAPSHO AT MARKETS T 1103 CET CURRENC IES Latest Previou Daily Change s bid close change in 2021 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calcula 1800 daily ted CET change from STOCKS Latest Previou Daily Change s close change in 2021 .PX Prague 1283.46 1290.51 -0.55% +24.95 00 % .BUX Budapest 52313.0 52514.9 -0.38% +24.24 7 4 % .WIG20 Warsaw <.WIG20 2349.00 2364.63 -0.66% +18.40 > % .BETI Buchares 12349.2 12346.7 +0.02% +25.94 t 8 1 % .SBITO Ljubljan <.SBITO 1182.22 1187.44 -0.44% +31.23 P a P> % .CRBEX Zagreb <.CRBEX 1951.44 1954.51 -0.16% +12.20 > % .BELEX Belgrade <.BELEX 802.38 802.38 +0.00% +7.18% 15 15> .SOFIX Sofia <.SOFIX 564.76 565.43 -0.12% +26.19 > % BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spread Republic CZ2YT= 2-year s CZ5YT= 5-year s CZ10YT s Poland PL2YT= 2-year s PL5YT= 5-year s PL10YT s FRA 3x6 6x9 9x12 3M interba nk Czech Hungary Poland Note: FRA quotes are for ask prices *********************************** *************************** (Reporting by Jason Hovet in Prague, Alicja Ptak in Warsaw, and Anita Komuves in Budapest; Editing by Ramakrishnan M.)

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