CEE MARKETS – Forint bounces further from record low after 1 week deposit rate rise

By Jason Hovet and Anita Komuves PRAGUE/BUDAPEST, Nov. 25 (Reuters) – The forint gained for its second day on Thursday and bounced further from a historic low to turn a profit in Central Europe after the Hungarian central bank cut its deposit for one week had raised interest rates by 40 basis points to 2.9% as it battles rising inflation risks. The deposit rate hike was the second in a week, after the bank raised its key base rate to 2.1% this month and said it was ready to raise the rate on one-week deposits above the base rate, prompting traders and analysts. said, could support the forint. By 0949 GMT, the forint was up 0.55% on the day to 366.7 for the euro, from a session high near 368. “This (deposit rate hike) will be enough to put out the fire, as the forint has really picked lately, but the international environment really needs to change to make the forint significantly stronger,” said a trader. The forint hit an all-time low of 372 for the euro on Tuesday as Central Europe’s currencies come under pressure from the strong US dollar and a spate of COVID-19 cases across Europe, leaving investors concerned about the economic impact. Hungary reported a record number of new infections on Wednesday, following the same trend in the Czech Republic and Slovakia, where governments have already tightened restrictions to contain the rise. Slovakia went into a two-week lockdown on Thursday. Elsewhere, the Polish zloty rose 0.2% and the Czech koruna 0.1%. Central banks across the region have tightened policies in response to inflation spikes attributable to global factors, amid supply chain problems and rising energy costs, as well as tight labor markets in central Europe. Poland’s central bank governor Adam Glapinski told Interia’s website on Wednesday that recent rate hikes should help the zloty, which has hit a 12-year low. “If the strengthening of the currency is short-lived, the central bank could step in and intervene in the market,” Erste Group Bank said. ** Hungarian Forint since 2008: https://tmsnrt.rs/3xoDmH6 CEE SNAPSHO AT MARKETS T 1049 CET CURRENCY IES Last Previous Daily Change Bid Change Close in 2021 EURCZK Czech EURHUF Hungary 0 0 EURPLN Polish EURRON Romanian EURHRK Croatian EURRSD Serbian 0 0 Note: calculation 1800 daily ted CET change of INVENTORIES Last previous daily change closes change in 2021 .PX Prague 1369.78 1371.32 -0.11% +33.36 00% .BUX Budapest 52805.9 52535.9 +0.51 % +25.41 2 7 % .WIG20 Warsaw <. WIG20 2235.52 2239.75 -0.19% +12.68 > % .BETI Bucharest 12598.5 12536.2 +0.50% +28.48 t 1 5 % .SBITO Ljubljan <.SBITO 1248.56 1242.32 +0.50% +38.60 P a P> % .CRBEX Zagreb <.CRBEX 2002.09 2000.63 +0.07% +15.11 > % .BELEX Belgrade <.BELEX 808.45 812.47 -0.49% +7.99% 15 15> .SOFIX Sofia <.SOFIX 618.13 621.07 -0.47% +38.12 > % BONDS Yield Yield Spread Daily (bid) change vs Bund change in Czech spreading republic CZ2YT= 2 years s CZ5YT= 5 years s CZ10YT s Poland PL2YT= 2 years s PL5YT= 5 years s PL10YT s FRA 3×6 6M interbank Czech 3×12 Hungary Poland Note: FRA quotes are for asking prices ************************************ **** * ******************** (Reporting by Jason Hovet in Prague and Anita Komuves in Budapest; Edited by Uttaresh.V)

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