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.
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